Categories Property Management

How to Master Your Lease Renewal: Tips for the Full 120-Day Cycle

In 2022, it’s not surprising that lease renewals will reach an all-time-high, fueled by tenants who were unable or unwilling to move due to the pandemic. As the economy continues its recovery, and as tenants are more willing to move, lease renewals could become a critical area for single-family property management.

Propertyware and Buildium conducted a survey with tenants, property owners and managers to create their Rental Owners’ report. Filling vacancies was the second most stressful thing for owners surveyed. This trend is likely to continue .

Property managers have always had to make the process as efficient and effective as possible in order to maximize resident retention rates and renewal rates. To truly achieve efficiency in the months to come, you must play the long-game and begin planning right now.

This article will take you through the efficiencies and pragmatic improvements that you can make 120, 90 60 and 30 days before a decision is made to renew.

120 Days Out

Four months before the lease expires, you should begin the lease renewal process. This early start will ensure that the process is smooth and free of any last-minute problems or hiccups as the renewal date approaches.

Three things to do in advance of 120 days for a smooth process.

Lease Renewal Process Standardization

You should already have your standard forms and procedures in place before you reach 120 days.

Start by creating shared documents to record each step of the renewal. Set up custom fields in your property management software to track every step of the renewal process, from assessing eligibility for renewals to signing the lease.

You can create subcategories in your custom fields for lease types with similar requirements and a timetable. This will allow you to group these leases together. You can, for example, group all your six-month rentals under the same subcategory.

It is also a great opportunity to encourage owners and tenants to use your portals for tenant and owner communications. Propertyware provides tenants the option to communicate with their portal whether they intend to stay or leave. This keeps all communications together and allows managers to take other actions depending on the tenant’s response. You can also use automated emails or notifications to inform tenants outside of the portal.

This is also a good time to establish a schedule with your owners. Set expectations about your availability and communicate regularly.

Renters’ feedback is important

You don’t need to commit to anything at this stage, but it is important to know if the tenants intend to stay or to leave. You can then update the fields in your database to reflect their decision.

Ask about any maintenance or repair issues that are pending and create Work Orders so they can be resolved before the lease expires.

You should ask them why they don’t intend to stay. You can walk tenants through what they need to do to officially terminate their lease. You should encourage tenants to submit their intention to vacate through a tenant portal, which will lead to an inspection prior to move-out.

Find out if you qualify for a Lease

A good software solution can be very helpful in this situation. Use report functionality for rent payment history or maintenance requests. All the information is in one place. You don’t need to search for emails or check stubs between you and your tenants.

Share your reports with the owners so that you can both decide how to proceed for upcoming renewals.

90 Days Out

Calculate Renewal Terms & Rates

You can determine the renewal rates and terms of leases once you have identified which leases will be renewed. You can discuss rate increases and new lease terms with your tenants. Take a look at the current rental market.

  • Comparing MLSs
  • looking at data on Internet Listing Services (ILSs)
  • Looking at similar properties within your portfolio

Also, you’ll want to consider seasonality. You don’t want to find yourself with a lease expiring during a slow season. This will make it difficult to obtain the full rental value of the property.

Verify the Owner’s Intent To Renew

It is time to involve the owner in the conversation to confirm that they plan to renew the lease. This will allow you to reach out to the tenant. It is important to get their official response. Property management software allows you to easily communicate with owners via a wide range of channels, including email, text, mail merges and conversations within an owner portal.

Tracking Owners’ Responses

Even though most owners will respond quickly, you should still stay organized and on top of their responses to avoid wasting time. All of this communication and follow-up is much more organized and efficient with property management software. It’s also a huge advantage that everyone in your team, including your owners, can easily access the same current information.

A best practice to facilitate communication is to send a letter requesting esignature from the owner, sharing your recommendation for renewal, including eligibility, rates and terms.

You can also rescreen your tenants when renewing their lease. It’s good to check again for criminal records. Propertyware allows you to do this with a click of the button at a discounted rate.

60 Days Out

After 60 days tenants must confirm in writing their intention to stay or depart. If you use a tenant portal they should be able do this by simply clicking a button.

It’s important to have a lease agreement renewed even if the tenant does this. Propertyware makes it easy to do this. Select the lease agreement that you want to send to your tenants and then use the mail merge feature to send them the document. The new tenants can sign the lease using eSignature.

30 Days Out

Run a report at 30 days to ensure that all leases have been signed. Follow up with tenants via the tenant portal if some leases are not signed.

Your reports can be used to confirm the move-out date and request maintenance, inspections and cleaning from staff and vendors. Custom lease views can be used to keep track of any outstanding items, which is very helpful since there is so much to do.

Lease renewal is a complex process that involves constant communication between tenants, property managers and owners. Lease renewals will be more transparent and efficient if software allows you to customize fields, simplify communications and store documents. Every 120-day period offers a fresh opportunity to do things right.

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