Best Practices for Increasing Income with Lease Renewals
- Do a walkthrough! This gives you an idea if you want to renew or not and how they are maintaining the property.
- Pull comps! You’ll want to see what the comparable properties are renting for in the area. This will help you justify any increases if the tenant asks why rent is going up.
- Have balance! If you have a great tenant that pays on time and takes good care of the property you may want to do only a slight increase as a “reward” to the tenant. If you make a jump in rent that’s too high, they may move out and it may cost you more money as you’ll have to pay a commissions for finding a new tenant. Make sure you weigh all scenario and don’t forget to acknowledge a great tenant. You can also ramp up rental rate over time through a formal amendment.
If you have any desire to sell the property in the near future, you may want to do a shorter lease renewal to put a possible vacancy in the spring/summer months where it would be easier to sell.
If you have any questions, feel free to reach out to us at 817-462-0303.