A dedicated property management company, like Independence Capital Property Management, is not just about getting a property rented, it’s about maintaining a property rented as well. For this we strongly believe in pushing for lease renewals.
WHY PUSH FOR A LEASE RENEWAL?
It’s common in the communities that we serve, for property management companies and “do it yourself” landlords to have an initial term, and then somehow fall into a month to month lease. We, on the other hand, strongly push for lease renewals. We do this for several great reasons.
First and foremost, lease renewals help us avoid turnover costs. For instance, if you know you are on the last tenancy on the carpet of a property and are going to have to replace it soon, at this point, we could have the tenant renew the lease, so we can avoid these costs now, allowing us more time to save appropriately for these expenses.
Renewing a lease also keeps us away from releasing the home in low leasing seasons. Most communities have leasing seasons. Ours for example, begins approximately in February and goes on to the end of July. During this time, people are looking to move, and leasing a property is much easier and faster. But if a tenancy is allowed to roll into a month to month, chances increase of them moving out in the lower leasing season around the holidays in November and December. This will be a lot more costly because your days on the market and the vacancy time is going to significantly increase in those months, considering it would have taken only a couple weeks at the most to release a home in the leasing season and more than double that in the off season. Furthermore, renewing a lease helps control the tenancy rotation. Instead of those leases rolling in and out during low leasing periods, you could get those leases moving and working for you during the actual leasing season.
Renewing a lease also shows your tenant that you’re dedicated to them, that you are interested in keeping them for another term. This makes them feel appreciated and that we want them to keep the home and they’ll be happy to stay as well. It’s a win-win situation where both parties are committed.
A leased property is also appealing to mortgage companies. When you’ve gone beyond your first or second mortgage, having a term with a tenancy helps set their minds at ease. This is so, that often times we’re asked to provide leases to mortgage companies so that way they can ensure that the property is rented and often times month to month terms are frowned upon.
So as we can see, pushing for lease renewals has many advantages. It will always be more favorable for all parties to be in term and to set those months that they’ll be in term in the higher leasing seasons add more money to your bottom line.
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