Maintaining good renters who pay their rent on time is a great way to make sure that your rental property continues generating revenue. Afterall, lower vacancies mean more profit and less time you need to spend on screening new renters to fill empty units in your building. When bad debt is at a historical all time high due to COVID-19, keeping good renters who pay their rent on time is more important than ever before.

In order to get your best renters to renew their lease, it’s important to consider how to reach out to them, and what you can offer them in order to incentivize them to stay.

The benefits of renewing a lease

Finding new renters can be a costly process. Aside from the marketing costs of listing and promoting your property, there are also costs associated with renter screenings (e.g. credit reports), and personnel costs (i.e. time spent) for reviewing applications and showing your property to potential renters. 

But the main, indirect costs are empty units, not generating revenue during your renter search, which could last months. All of these costs can add up, causing landlords and building owners to pay out $100-$2500. Save time and money by keeping your current renter. 

Five ways to get renters to renew a lease:

1. Reach out 90 days before the lease expires

Give renters written notice in a lease renewal letter 90 days before the end of the lease. 90 days will give your renters time to consider if they would prefer to stay. Everyone needs a little time to think. If they like their current apartment, it’s a no brainer! Yet, giving renters 90 days to think things over shows that you are considerate. Remind them that you’ll need an answer by a particular deadline. The best time frame by which to have an answer is 60 days before the lease expiration date. That way you will have ample time to source new renters.

2. Use your property management software to automate the process

There are tons of property management software programs on the market (some of them are free!) that can generate lease agreements, monitor existing leases, help renters pay rent digitally, and even accept maintenance requests. It is a technologically efficient way to keep engaged with your renters. These landlord software programs can create a template lease renewal form and make lease extension as easy as sending an email! 

ProTip: Rhino can seamlessly integrate with your property management software to improve processes and efficiencies. So when your renter renews their lease, their Rhino policy, including coverage amount, can be updated and adjusted automatically to extend with their lease renewal!

3. Flattery

Everyone likes to be complimented! In your lease renewal letter or in personal conversations with your renter, it is always helpful to let them know they are valued. You are offering them a lease renewal in the first place because you think they are great renters who respect your building. Letting people know they are appreciated is a friendly way to approach lease renewal.

Image of renters discussing how to renew their lease
4. Hire a property management company

Approaching a renter about a lease renewal is a delicate business. Landlords must be respectful of a renter's privacy and remain professional without being pushy. Some property investors simply may not possess the skills to accomplish this effectively. So it might be worthwhile to look into hiring a property management company. Property management companies handle repairs, emergencies, and earn the trust of your renters so that when the terms of a lease reach their end date, renters will feel ready to sign a new lease.

5. Referrals

To increase occupancy before the lease end date, one way to ensure solid new renters is asking a current renter if they know anyone looking for a new place to live. Referrals are the lifeblood of any business and if you’ve got a good renter, it’s very possible their referrals could be just as loyal and respectful.

Image of a renter renewing their lease agreement

Five incentives you can give renters to renew a lease:

1. Respond quickly to maintenance requests

A reality of any rental unit is that things break. Sinks get clogged, appliances break, vermin arrive at inopportune times. Responding quickly and efficiently to maintenance requests is one of the best incentives to keep a loyal renter. Follow up on resident feedback and see if you can meet their needs. This will make renters feel as if they are heard.

2. Offer Rhino

Of course offering Rhino at the time of lease renewal is another great incentive. Rhino’s security deposit insurance makes renting deposit-free, and more affordable for your renters. But how does it work with a renter renews? 

Renters buy an affordable insurance policy instead of paying the cash deposit, and this insurance protects your property from damage or unpaid rent all the same. When renters renew their lease and add on Rhino, they get their original cash security deposit back with zero compromise to your property’s protection.

Offering Rhino would likely incentivize renters to stay, as they could get their security deposit returned to them, and it could help offset other costs for them, such as an increase in rent.

3. Technological upgrades, free WiFi, and community amenities

While adding high cost amenities like gyms or dog parks is certainly enticing, easy tech upgrades will make the largest impact on your bottom line and they are low-effort investments. Smart devices, smart lights, smart thermostats, and keyless entry are affordable, and make renters feel as if they are living in a convenient future! Gen Z & Millennial renters also need high functioning connectivity, especially as the trend of working from home continues, so offering free wifi and high speed internet connections are major necessities. You’d be amazed how persuasive free wifi is for Gen Z & Millennial renters! With so many ransomware attacks in the news recently, it also might be worthwhile to invest in building-wide cybersecurity and upgraded routers.

4. Free rent

When attracting a new renter, it is a common incentive to offer one to three months free rent. Why save the incentive for new renters when you can reward renters with an existing lease? One of the incentives for your renewal lease could be: first month is free! When considering all of the associated costs for finding new renters, you could still wind up saving money in the end, while rewarding your current renter’s loyalty. This will not go unappreciated, and when lease renewal comes up again next year, your renters will feel even more motivated to renew.

5. Update your units

Has your current renter mentioned that their appliances are out of date? When was the last time your unit got a new coat of paint? Is the wall paper peeling? Is the ceiling fan from 1965? Is there central air? It might be a great time to replace an ancient microwave or upgrade a laundry area. These maintenance upgrades might inspire loyalty in your renters and encourage them to finally renew a lease if they are on the fence. Regardless of whether your current renter chooses to renew the original lease terms, upgrades increase the value of your unit and you are ultimately making an investment in yourself.

Finding new renters is an expensive and time-consuming hassle. If you offer incentives and reach out in a timely and tactful manner, you can hold on to great renters and maximize long-term occupancy for your property.

Interested in partnering with Rhino to offer security deposit insurance to renewing renters? Contact us today.

Headshot of Jessica White, senior product writer at Rhino
Jessica White

Jessica White is a senior writer at Rhino who considers herself a queen of small victories. She believes that every renter’s biggest win is kicking cash deposits to the curb.