The Dallas-Fort Worth area is one of the most competitive rental markets in the US. Vacant units see an average of seven applicants and get filled in 41 days.
Attracting tenants isn't the best way to keep your properties filled in a market like that. It's more important to keep the ones you already have.
Read on for five mistakes to avoid during lease renewals.
1. Not Starting Lease Renewals Early Enough
Begin pushing for a rental agreement renewal at least six to eight months before the current agreement expires.
Send your tenants reminders. They'll have time to think and won't run to another property.
Offering incentives is also one of the best tenant retention strategies. Try a temporary discount on rent.
2. Not Inspecting the Property
Conducting regular property inspections is one of the most all-purpose property management tips. It improves everything else, including lease renewals.
Forgoing inspections can lead to increases in:
- Lease violations
- Property damage
- Unidentified maintenance issues
An inspection can help you decide if a tenant is responsible enough for you to consider renewing their lease. It can also help you determine if any changes need to be made to the agreement.
3. Not Raising Rent Properly
Lease renewals can be a chance to raise rent, but don't let that put dollar signs over your eyes. You have to do it appropriately.
Check the local market conditions. You don't want to put your rates too far above or below the average. Otherwise, you could miss out on potential income or scare away potential tenants.
Texas has no legal limit on how much you can raise the rent. You should still exercise caution. Try to explain to renters what the increase will cover.
4. Not Being Flexible
One of the pieces of lease negotiation advice is to stay flexible. The way to win is to compromise.
Do they need a different lease length? Do they want to change a few terms from the original agreement?
Flexibility is also one of the best lease extension tips. An extension continues the existing agreement, while a renewal creates a new one.
Agreeing to a few reasonable changes can help you maintain positive tenant relationships. That'll keep them wanting to come back.
5. Using Generic or Outdated Forms or Templates
Having a set procedure for lease renewals that you follow every time is not a negative. It makes the process more efficient.
It becomes a problem when the forms or templates you rely on are generic or outdated. The documents may not include all the information that your agreement needs. They may also not comply with current laws.
Look over your current system from time to time to make sure it's up-to-date and compliant. A property manager can do this for you.
Avoid Mistakes with Property Management in Bedford, TX
Lease renewals are key to real estate investing, but they're also easy to get wrong. Avoid starting too late, failing to inspect the property, raising rent too much or too little, not being flexible, and using generic or outdated forms.
PMI Metroplex is a full-service property management company serving the Dallas/Fort Worth Metroplex. We handle everything from getting tenants into your property to managing their requests. Contact us to see how we can preserve your investment and maximize its profitability.
