How Soon Is Too Soon To Renew A Lease That Is Ending
A rental property that is occupied by a tenant who pays the rent every month is the goal of every property owner.
Knowing when to renew a lease is something everyone with rental property needs to become skilled at. I am always surprised by the number of landlords that don’t know when all of their leases end.A rental property that is occupied by a tenant who pays the rent every month is the goal of every property owner. Click To Tweet
It is imperative to be proactive and find out as early as possible if the tenant intends to renew the lease or intends to move. The more lead time you have, the longer you have to find a new tenant.
Established tenants who are not students, probably already know whether they intend to stay or leave. It is usually just a matter of finding out what they intend to do and responding appropriately. Tenants who intend to stay will be happy to renew a lease. Any of your tenants who are moving will start a whole new process.Tenants who intend to stay will be happy to renew a lease. Click To Tweet
Student housing can be a challenge because there may be one student who has another year, one who is leaving at the end of the lease and one or more who may only need another six months to get through the next semester. The students that have only one more semester will not be in a position to renew a lease for another year.
You need to have a game plan in place with student housing. Know when each semester ends and enlist the help of your current tenants. We have students who actually bring us new tenants when one or more students leave. In this scenario, it is very easy to renew a lease. Students will start looking early to have the best possible choices.
For those students who only need another semester in the house, allow them to sublet to a new person for the last six months of the lease. You can add this person on an addendum or just allow the person listed on the lease to sublet to the new person.
How Soon Is Too Soon To Renew
I used to think that it was a waste of time to try to renew a lease or find a new tenant any sooner than 60 – 90 days. Honestly, showing a home that is occupied is a huge hassel and I hate doing it! It takes valuable time out of my day and so many people don’t even bother to show up!
Also, I used to think “Who wants to think about renting a property if they can’t move in for 4, 5 or 6 months?” I found that I was pre-judging people. The reality is that I don’t know what their plans are or what their agenda is.
More On Student Housing
Dealing with student housing has given me a whole new perspective. Students tend to start to panic several months before they need a place to live and start a frantic search to lock a place in months in advance. This makes perfect sense to me because student housing gets harder to find the closer it gets to a new semester starting. They need somewhere to live and are hot prospects, not just tire kickers.
I often start looking for new tenants for student housing about 6 months out and I actually get new leases in place! This is great because there isn’t much down time. The property continues to earn money each and every month.
Does This Work With All Properties
I started thinking, what if I did this with my other soon to be vacant homes? Would this work?
What I found is that there are a lot of people who don’t want to wait until the last minute to find a house. If this is February and they know their lease terminates at the end of June or July, they are eager to find a new place sooner rather than later. I have had really good luck renting coming vacants far earlier than I ever expected!
No More Procrastinating
I used to get really irritated when someone would call about a vacant rental but couldn’t move for several months. It finally occurred to me that not everyone waits until the last minute! This is great news for me and anyone else that has upcoming vacant rentals to rent.
The advantages are obvious. There is no down time so the property keeps earning money. Because the house isn’t vacant for more than a couple of days, there is less chance that someone will break in and vandalize it.It is imperative that you have all of your tenants sign a new lease when the original term expires. Click To Tweet
Keys To Success
Getting this system to work does take some planning. You will need a firm timeline and you will need to stick to it.
- Get a firm move out date from current tenant.
- Inform current tenant that a new tenant has been found.
- Schedule a pre-move out with current tenant to determine what repairs are needed.
- Go ahead and get as much of the work completed as you can while current tenant is in the home.
- Do the final move out with the current tenant when he has moved out.
- Have your other crews ready to start work left over the day the tenant moves out.
- Stay in close contact with all involved.
- Schedule the move in as soon as all of the work is complete.
- Get the new tenant moved in.
This can lead to a very busy few days, but it is well worth it in the end! Having little or no down time between tenants is the very best scenario. After all, the goal is to have your rentals provide passive income each and every month.
Do you have trouble figuring who will be a great tenant and who will be nothing but trouble? You are not alone! Click here to get some tips on how to properly pre-screen applicants.