Lease renewal is coming around, and one thing has changed the economic inflation rate. Because of the increase in inflation, it's only natural to increase the rent your tenants pay during the lease renewal period. This will ensure you're able to cover the inflation increase.
When it comes to lease renewals and increasing your tenant's rent, you're within your rights as a landlord to do so, but that doesn't mean it's going to be easy. Here are some tips to help you negotiate your lease renewal agreement below.
Do Your Market Research
The first thing you should do is research the current market in your area. You'll want to note the rental increases in the area and the number of people searching for a place to live.
When many people are looking for housing, you might be more inclined to raise your property's rental prices than if no one was looking for a place to rent.
Another reason to conduct market research is that when you speak with your tenant, you'll have the proof to support increasing the property rental price during the renewal lease period.
Stay Calm At All Times
During the negotiation phase, it's not uncommon for some tenants to become upset over the rental increase. No matter what the tenant says or how they react, ensure you remain professional and respond calmly.
Speaking out of anger or in retaliation to the things the tenant is saying will only give them the ammo they need to justify not renewing the lease. Even if the tenant is out of line, they might change the way they feel about the lease rental increase after they've been given some time to think things over.
Not to mention when you don't act professionally, the tenant could move out and tell other people that you don't professionally conduct yourself when living in your property.
Be Open to Negotiation
We understand you've got to make enough money to support yourself and your family. Regardless you should be open to negotiations with tenants about the rental price they'll end up paying after renewing their lease.
For example, if there is no wiggle room on the price you might consider offering, you could offer them a bonus for renewing their lease. If you are open to negotiating, have a set number in mind as the lowest you'll go and the number you'd like to set it at.
Ensure you keep things realistic and make the options known to the tenant.
Lease Renewals: Increasing Your Tenant's Rent Payments
Lease renewals can be a sore spot for many landlords and tenants, but that doesn't mean you should ignore them. When you're bringing up lease renewals with your tenants, remain calm and be open to negotiating the rental price.
Are you looking to list your rental properties or searching for quality tenant resources? Contact Precision Realty & Management for help.