Lease Renewal Strategies Every San Diego Landlord Should Know

Tenant satisfaction and profitability are not the only goals a landlord should set for their business. Tenant retention can significantly contribute to the overall success of your rental property. 

Lease renewals can come easily when you manage your property correctly, but there are a couple of strategies you can implement to ensure that happens.

Use Property Management Software

Managing multiple tenants can make it challenging to keep track of each lease expiration date. Property management software can automate lease tracking to tell you who needs to renew a lease and send them a lease renewal notice. The tool can also offer the option to sign a lease agreement digitally, making it convenient for both parties.

They can indirectly encourage tenants to renew their leases as well due to features that promote efficient property management, such as:

• Automatic Rent Collection
• Maintenance Request Coordination
• Centralized Landlord-Tenant Communication

Offer Lease Renewal Incentives

You can encourage lease renewals by offering incentives to tenants who don't want a lease extension. Most property owners offer a variety of benefits, like:

• Flexible Lease Terms: Residents with a month-to-month agreement might consider a more flexible lease duration to renew their rental agreement. Adding new lease renewal options would help the tenant decide better.
• Rent Discounts: This is the most common lease renewal tip for landlords, generally because it is also the most effective. Most tenants are already happy with their existing lease terms, but wouldn't say no to paying rent at a discounted price.
• Brand New Lease Agreements: Tenants may want an entirely new lease, and not just adjusted terms. It may be a difficult lease renewal process, but it's better than finding a new tenant.
• Access to Amenities: You can provide access to amenities, like a free parking space, laundry facilities, fitness centers, and more, provided that these aren't already accessed for free.

Lease renewal incentives don't have to be big. Some gestures are just meant to show your renters that you appreciate their tenancy. It can be minor rent adjustments or an entirely new lease agreement, but retaining tenants is often better than having to deal with tenant turnover.

Enhance Tenant Satisfaction

There's no need for lease renewal incentives when living in your rental property is a pleasant experience. You can do this by providing the necessary maintenance services, communicating with your tenants, setting favorable terms, and making rent adjustments when needed. Not only will you get more lease renewals, but you will also reduce turnover costs. Good property management trumps any renewal offers you can give to achieve resident retention.

Making Rent Price Adjustments

Research the current market to determine when or how much you need to adjust your rental rates. Property owners tend to forget that tenants have other options, and they will gladly explore those if they can save more. Furthermore, try to hold off on any rent increases before a tenant's lease expires. If you plan on increasing your rental rates, provide a rent increase notice a few days after the lease termination date.

Thorough Lease Renewal Letter

Before the current lease expires, it's wise to send a lease renewal letter to remind them that they have the option to acquire a renewed lease. This should outline important information such as the date to pay rent, monthly rent price, lease duration, and other lease term adjustments you may have made.

Meticulous Tenant Screening

Sometimes, the best way to ensure that a renter will continue with lease renewals is by finding good tenants through background checks. The renewal process will be much easier when you know that you have reliable tenants who follow the lease agreement. Proactive measures are the foundation of stress-free lease renewals. It's much harder to get bad tenants to renew a lease, or even want them to stay in your property for another term.

Steps to the Lease Renewal Procedure

1. Ask your tenants what they need. You can consult your resident about what they need to renew a lease. You can negotiate terms and inform them about the potential benefits of lease renewal, along with renewal options for fixed-term or month-to-month leases.
2. Create a new lease agreement. If there are agreed-upon changes to the original lease, you can begin drafting a new one for lease renewal.
3. Sign the lease. Once you have made changes to the lease agreement or drafted a new one, you and the tenant can sign the lease.
4. Make good on your renewal offers. When you offered incentives for your lease renewal, such as access to a parking space or a free month of occupancy, be sure to fulfill your promises to encourage lease renewal for the next term.

Lease Renewal FAQs

Can I increase the rent during lease renewal?

• As part of negotiations, you can. However, it's not recommended since it can lead to tenants ending their lease instead of renewing it.

When should I offer a lease renewal?

• Landlords typically offer a lease renewal 30–90 days before the lease ends, giving both parties time to review terms and make decisions. For month-to-month leases, a week prior is advisable.

What happens if a tenant doesn’t respond to a lease renewal offer?

• If the tenant doesn’t respond by the deadline, the lease may convert to month-to-month, or the landlord can issue a non-renewal notice depending on local laws and lease terms.

Is a new lease required for renewal?

• Not necessarily. You can use the same rental agreement when tenants renew their lease. If there are changes, you can simply add new terms to the current lease agreement.

Can I refuse to renew a lease?

• Yes, but you have to give proper notice, at least 30 days before. Make sure it's for a valid reason, as discriminatory and retaliatory refusal can lead to lawsuits.

Let Harland Property Management Take Care Of It

Lease renewal precedes the renewal notice a landlord provides. A tenant's decision begins right at the start of their occupancy, which means that resident satisfaction is just as crucial. At Harland Property Management, we take all factors into account to ensure tenant retention.

Efficient and expert management prevents tenants from breaking their lease early, and that's exactly what we aim to provide. Let us help you with your rental business! Contact us today to learn more about what we can do for you.

More Resources:

• The Benefits of Simple Property Management Solutions for Landlords in San Diego
• How the New Tenant Screening Law Impacts the Application Process in California