You don’t want to wait until the day before a lease ends to find out whether your tenant plans to stay in place or leave your property. Lease renewals require planning, preparation, and a process that’s clear and easy for tenants to follow. The lease agreement should provide notice periods for providing an intention to vacate and accepting an offer to renew.
Retention is something every Orlando landlord wants to work towards because a successful investment experience relies on a high renewal rate. Keeping a good tenant reduces your turnover and vacancy costs, and increases your ROI.
Here’s what you need to know about those important lease renewal steps.
Preparing for Orlando Lease Renewals
Your lease must indicate how much notice a tenant needs to give before vacating or renewing the lease.
We recommend at least a 60-day requirement. Some leases will require 30 days, but that’s not always enough time for you or for the tenant. With a 60-day notice period, you can extend a lease renewal offer to your tenant two months before the end of the lease agreement. If they do plan to move out, you’ll get the notification in writing at that time.
When your tenants decide they want to renew, you’ll likely create a new lease. That renewed lease agreement will reflect new start and end dates as well as a new rental amount. We’ll talk more about the rent increase later in this blog.
If you’re renting out a home in an HOA or community association, you’ll need to research whether there’s additional renewal paperwork required by the association.
Inspect Before You Renew a Lease Agreement
Conducting an inspection of your property before offering a lease renewal can help you ensure that your tenants have been taking care of the home and keeping it clean. Let your tenants know that you’ll be in touch to schedule a walk-through and inspection.
It’s an opportunity to check for any deferred maintenance issues or unreported repairs. It also helps to ensure the tenants are following the terms of the lease. If they’re taking good care of the home, you will certainly want them to stay in place for another year.
Is This a Tenant You Want to Keep?
Deciding to renew a lease depends on property conditions and the behavior of your tenant. One factor to consider when you’re thinking about renewing a tenant’s lease is if they pay their rent on time. If they do pay on time consistently every month and you’ve never had to send a reminder or ask where the payment is, that’s a good reason to renew the lease.
However, if your tenant doesn’t pay rent on time every month, you’ll need to decide if you’re okay with that. If they pay a few days late every month but they always pay, you might find it tolerable since you get to collect a late fee. The tardy payments may be inconvenient, but if you like the extra income that late fees provide, renewing with a tenant who pays late might also work out well for you.
Rental Increases and Lease Renewals
Evaluate the Orlando rental market and decide if a rent increase is warranted. We suggest you get help from an Orlando property manager so you have reliable data on the average rental rates for homes like yours in your neighborhood.
With our lease renewal process, we take a close look at market rents and make recommendations to our owners about whether rent should be increased and if so, by how much. Most tenants expect a rent increase during a lease renewal period, but you don’t want to chase away a great tenant with an increase that’s too high.
These are some of the basics you’ll need to think about while you’re renewing a lease agreement. If you’d like some help with this part of the process, please contact us at Park Avenue Property Management. We work in Lake Buena Vista, Orlando, Kissimmee, Celebration, Maitland, Altamonte Springs, West Palm Beach, Tampa Bay, and throughout central Florida.