Updated November 15, 2021
The end of a lease marks an anxious period for landlords. If tenants decide to move, landlords must market the rental and find good renters. It’s why having tenants stay is much easier to deal with, and of course, financially better. So, how do you motivate tenants to extend their leases?
The following are just some of the ways to encourage tenants to extend their leases
Provide an Incentive
People love to save money. If they feel as though they are getting a deal, they will be more likely to stay. You can provide this deal by giving them some money off their rent to extend their leases for longer than a year.
For instance, you can make it a one-time discount of $200 off. You would probably have to spend that much on marketing or worse, not having the place rented for a month or more, which would cost you more.
Alternatively, you can give them a monthly discount, such as 5% just for staying. The best way to determine what is best is to look at how much money you would lose and how much you can stand to lose while still making a good profit from your investment.
You can also give a resigning “gift.” Such as a gift card to a local gas station or grocery store for $100. This would help your tenants but also give them a good feeling about extend their leases.
Establish a Good Rapport
When tenants feel as though they have a relationship with a landlord, they are much less likely to move. They don’t want to let down the landlord, so they don’t even consider moving to another place.
Take time to get to know your tenants and be friendly with them. Of course, you want to remain professional since you are conducting business with them, but that doesn’t mean you can’t relate with them and help them feel comfortable with you.
If you have hired a management company to manage for you, ask them about their customer service and tenant rapport procedures. You want them to treat the tenants similarly to how you would treat them.
Ask Them What They Would Like for the New Year
Tenants want to feel as though their rental is their property. You can help them feel that way by accommodating their needs and wants. Ask them what they would like for the next leasing period, and make a reasonable effort in providing that for them.
For instance, if they would like a new dishwasher, consider it and replace the one they have if it makes sense. If they want to have a garden in the backyard, allow them to do it if it doesn’t ruin anything.
Working with your tenants will make them feel like they can live at their will while still renting your property. Obviously, as a landlord, tenants may ask for items that are not in the budget. Consider allowing them to do something to personalize the unit instead of an upgrade if it’s not necessary.
Be Flexible
If you know your tenants are thinking of leaving, ask them why. If they say they found a rental for less, see if you can match that rental price. It’s a good idea to check a resource such as Rentometer.com for information about rental prices in your area. This way, you know if you’re charging too much, or in some cases, not enough.
Of course, if they are looking for a larger place because of a growing family or a location that is closer to their work, you won’t be able to do much. You can only do as much as you can do, so keep that in mind as you work with your tenants.
Sometimes, nothing can motivate tenants to stay where they are no matter what you do. However, there is a lot you can do to keep them happy, which will increase the chances for them to extend their leases. Consider the tips above, and see how they work for you.
This article was written by the Rentometer Content Team. The Rentometer Blog features fresh takes and insights on rental housing topics, services, and technology.