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Lease Renewal Strategy for Landlords

November 04, 2022

Easy Lease Renewals

Rental property industry surveys have shown that attracting and retaining high quality renters is one of the top challenges among landlords and property managers.

Tenant churn is likely to increase due to employment changes, high cost of rent and cost of living, and a desire for change after 3 years of Covid.

Reduced tenant affordability is a chief concern for landlords as we enter 2023.  There is talk of a recession, and at some point tenants will be hit with financial pressures and then tough decisions. Some may want out of their leases.

But with all the negatives, you can use technology to communicate the value of your rental and make lease renewal a simple, fluid action they won’t hesitate to make.

Some Tenants Will Be Leaving

Yes, with inflation rising persistently, and some growth in unemployment, some renters will end their rental lease for affordability, lifestyle, tax or employment reasons.

As rents rise the perceived value of your rental house or apartment doesn’t. In fact, perceived value falls.  Value then, is something you can work on in your tenant communications and marketing strategy.

However, most renters don’t like risk, and moving is a big risk. This and more information should be shared subtlely with your tenant base so they don’t make rash decisions to terminate their leases in 2023. In this post, let’s discuss the benefits of strategic communications and doing more to keep your tenants.

Renewing leases is a whole lot cheaper and less time-consuming than trying to acquire a new tenant. Consider that one month of lost rent, cost of advertising, time to market the unit and show, inspect and clean the unit, renovate or fix, along with tenant onboarding, and it could equal 2 months rent. That kind of cost is painful.

3 Keys to Lease Renewal Success

Better retention and lease renewal rates might be accomplished via:

  1. tenant experience management
  2. tenant communications and marketing (concessions, benefit packages)
  3. leasing technology

Tenant Experience Management

This might fall under the umbrella of tenant management strategy. The tenant experience encompasses everything you do from the initial advertising listing, to creating the right lease, to showing and inspection, to leasing negotiation, to onboarding, to ongoing communications and tenant support activities. You can learn more by clicking on those links that cover the individual facets of the tenant lifecycle.

Tenant Communications and Marketing

Via your software platform’s tenant portal, you can deliver the type of communications that tenants need to receive. That communication isn’t just informational but rather crafted to show respect, concern, and a dedication to make their living experience the best it can be.

For tenants, it is all about lifestyle and quality of life. For each tenant, that experience varies. Your tenant communications system can play a big role in getting to know your tenants (feedback/preferences) and to ease the issues that plague them.

Leasing Technology

Some aspects of the leasing process can be virtualized and automated. If you use customized or templated leases ready to send to tenants, they’ll appreciate the convenience.

Most tenants don’t think too much about the lease, assume it’s the same, and may not even read the lease fully. It’s so convenient, they just sign even though they have thoughts about leaving because of the rising rent or other issues.

Whatever documents you need to have them read and sign can be sent, with instructions included. In your property management software, you can track customer info, leasing and move in dates, particulars such as pets, parking, etc. The system notifies you and can send the renewal notice out on the day you specify.

Lease-based administration: Did you know the lease actually can control transactions, alerts, late fees, partial payments for utilities, invoice amounts, bills, and rent due?  Automation is a blessing for landlords and property managers.

The administrative details apart, the real value of leasing technology is better preparation, better tenant retention, reduced errors, and flawless execution according to lease dates. Because the real goal is to make being your tenant an enjoyable experience in every way possible.  They get that message.

Continuous Support for Lease Renewal

Your ongoing tenant communications strategy starts when you meet them and during their onboarding. If you continuously communicate and reinforce your brand, value offer, and benefits, tenants get a laser clear idea of why they should stay put.

And tenants do leave unwisely. They get seduced by other property managers and developments and about feeling better in a new location. The grass is always greener on the other side. Hopefully, when you get tenant feedback, you’ll learn which apartments/developments they feel are better than yours and why. Competition is a threat.

The Lease Renewal Strategy

As a Property Manager, your goal is perpetual lease renewal. Strategy means purpose for everything you do — to keep them feeling good and building intent to stay put. If they visualize permanence, then your renewal work is easier.

When you’re thinking about how to get tenants to renew their leases, it’s best to plan how everything will point to that simple end goal: lease renewal.

Be Systematic and Use Your Software

A good lease renewal strategy is simple and focused which makes it easy to conduct.  Here are the strategic touchpoints to evaluate and improve, during the life of a tenant lease:

  1. using media to build and promote your brand (unequalled quality they won’t find elsewhere)
  2. tenant communications (from first contact to ongoing updates with tenant) — builds friendship and caring relations so they feel they do belong and are glad to be renting your property
  3. lease writing and presentation online — (clearly stated, and worded to convey respect and value for the tenant)
  4. automating lease delivery through tenant portal
  5. style of doing business — transparency, consistency, honesty in communications (trust)
  6. communication via phone, email or property management software (relationship building – makes the tenant feel this is where they belong)
  7. maintenance and repairs — asking the tenant what they like and how they’re enjoying living there and if there’s anything you can do for them
  8. creating an enhancement to unit each year (incentives)
  9. responding to their intent/notice of terminating the lease (being ready to respond or make a better offer to them )

All of the above points reinforce the theme of them staying as your tenant and signing the lease soon.

Big Picture Thinking Makes it Simple

This isn’t an automation process. You’re enhancing the timing your personal communications/service in a human way with an underlying message of “stay leased, you belong here.”

 

What you say to tenants, do for them, how you express appreciation, and how you respond tells them whether they should stay.

 

Look at how you onboard, handle maintenance tasks, compose a newsletter, write your leases, and when you reach your tenants. How do your phrase your communications with them? Read those messages again months later like an editor would. Do your old messages sound like you appreciate them and want them to stay?

Even the tone of your voice has an impact. It shows your real intent whether you realize it or not. And for some tenants, these things have big emotional impact.

The Power to Stay or Leave

Some tenants leave because they feel that leaving is the only power they have. In your messaging, you can make them feel they have power to create the lifestyle and relationship with you that they prefer. They can vent their feelings constructively.

Speak about the property professionally and make it sound like a great place to live. Talk about it as though it’s the best launchpad for the rest of their lives. Tenants leave when they have a reason to leave – don’t like the neighborhood anymore, moving to be 10 miles closer to work, or to lease at some other place which has better appliances and amenities.

Ask for feedback on how you can help them feel more comfortable in their apartment or building. Find out what disappointments, friction, and conflicts they have so you know how to make them feel empowered.

What You Visualize Becomes Reality

When you think ahead and visualize positive relationships with valued tenants, everything you do as a property manager or landlord will make business sense. Property management is tenant management.

It’s not enough though to visualize and hope all goes well.  Examine all touchpoints, interactions, and the real value of your property to them, and you’ll find ways to keep them happy.

 

See also: Property Management | Landlord Software | Landlord App | Evaluate Your Software Options | Interest Rates and Home Prices | HOA Management Software | Homeowners Association SoftwareTenant Screening | Tenant Churn | Improve Cash Flow | Property Management  | Best Multifamily Markets | Property Management Accounting SoftwareLas Vegas Housing Market Forecast |  Property Management Companies Near Me | Property Management AppsRental Housing Market |  Cloud Property Management Solution | NARPM 2022

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