There are of course dozens of reasons why a tenant might renew or not renew a rental agreement at the end of the term, but some common ones tend to crop up again and again. There’s a major lesson to be learned here, and it’s all about anticipating and avoiding the common pitfalls that can send tenants scrambling.
Before we get to some of the methods for getting tenants to renew, we’ll look at the most frequently cited reasons that they don’t.
First up, naturally, is an increased cost of rent. When the rent price goes up, tenants feel the pressure. What might seem to you like a small increase could mean the difference between affordable and not. Of course, to stay profitable you’ll eventually have to increase rates, but be sensitive to the market: only raise rates if you must, not because you just want a few extra dollars per month.
Another big reason for non-renewal is a lack of modern features that may have become commonplace in the meantime. This means appliances, outlets, plumbing, and more. You don’t need to have the latest and greatest - unless you’re commanding an accordingly high price - but you’ll want to at least stay competitive in your area. Tenants will move to better pastures if they’re available at the same price.
One major reason tenants might not renew is a lack of communication. This means that you aren’t keeping up your end of the bargain in the tenant-landlord relationship. Whenever changes happen with regards to the property, you need to let everyone know first thing. If something goes wrong, tenants need to know that they have your attention. It’s all about keeping everyone in the loop and keeping the relationship strong. If they don’t feel that strength, they might flee when given the chance.
This leads directly into another important factor: keeping up on maintenance. When things break, fail, or otherwise fall into disrepair, it’s up to the landlord to ensure that a solution is found in a timely fashion. We’ve heard far too many stories from friends and family about buildings with bad wiring, broken appliances, and worse, all resulting in those people leaving the property as soon as legally allowed. Accidents happen, but inaction on the part of the landlord is a choice.
Another reason that tenants decline to renew is, of course, other tenants. If they don’t feel safe, comfortable, and happy in their units, they won’t remain. When a tenant experiences excessive noise on a regular basis and there’s no appropriate response and action from the landlord, they have every right to want to leave.
There are more reasons that tenants decide not to renew, many of which are out of your power as a landlord, but they’re all worth keeping in mind. Some, such as growing families and new careers, are great reasons, but others aren’t. From financial pitfalls to issues with the wider neighborhood, you’ll want to keep track of what’s happening before you find yourself with a mass exodus.
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