7 Lease Renewal Incentives Landlords Should Consider
It’s not even about the money you earn, it’s also about the money you don’t lose. A vacant apartment or house is costing you in terms of maintenance, upkeep, taxes, and trying to find new tenants. At the same time, you’re not getting any income from your real estate investment.
So, when you get reliable tenants, you naturally want them to stick around as long as possible. The lease renewal can be a tricky business, especially with the housing market being so unpredictable right now, so here are some lease renewal incentives to consider.
Ultimately, you want to re-sign those quality renters; for that, the following lease incentives could be the best ways to start!
Lease Renewal Incentives
1. Cash Incentives
For many tenants, the temptation of a cash bonus might seal their decision to renew their lease. This might be especially true of couples or single individuals who are still living in a 1 bedroom unit and probably want to save what they can.
For most tenants, you can decide whether a discount on their rent might be possible.
After that, you can consider actual cash, security-deposit rebates, etc. At times, it might be enough to just offer some tenants direct incentives such as gift cards from Target or Amazon. The incentive equality and likelihood of success will vary according to the tenants’ age groups, family size, socioeconomic status, and several other factors.
Another example of an attractive cash incentive is to have desirable renewal terms. For instance, a landlord might offer a two-year lease renewal at little to no increase in the rental rates.
This way, the tenant is happy at having at least one major cost unaffected by inflation rates. At the same time, the landlord gets to have their quality tenants firmly in place for two years instead of one (or however long the deal is for).
2. Gift Incentives that Aren’t Monetary
When we use the word “gift” here, we mean something that’s non-monetary. For instance, you can offer tenants certain upgrades, such as a ceiling fan or a newer model of an appliance. Appliances that they don’t already have, such as an air fryer or toaster oven, might also get a lot of appreciation. Since the kitchen is among the most essential rooms in rentals, start thinking from there.
Other items you can consider are televisions, tablets, a new bed, etc. Perhaps it would help to take a tour of the place or just keep your eyes and mind open when you’re talking to your tenants. They might need a certain item and let it slip mid-conversation.
Another convenient non-monetary incentive could be the option of covered parking near the rental property. If you already provide parking in exchange for a fee, consider waiving it for the next year or at least give a discount. You can also offer free parking to residents who have been renting from you for a certain number of years.
Covered parking will be especially attractive for those who live in a very cold region. With snow and other weather elements, people are always looking for places to park their car safely. Having a nice spot near your tenant’s home will certainly make them think twice about moving out (if ever!).
3. Unit Upgrades or Enhancements
When you’re offering homes for rent, be ready to upgrade the place a bit as time goes by. Remember, if those quality tenants end up leaving, you might have to spend a lot on upgrades to attract new parties. You can probably save money and hassle by working on a unit upgrade now without paying for a whole rehaul.
If most of the rental place is carpeted, you might want to offer free carpet cleaning to start with. A better incentive is to get new carpeting, a coat of fresh paint on every wall, or new flooring, according to the tenants’ wishes. However, keep in mind that such major upgrades should only be offered to tenants who have been with you for at least five years.
Getting a washer/dryer could also be a great incentive here. The main aim here is to make changes that positively affect the whole rental. Don’t think of it as spending money to make other people happy; everything you do in this regard will ultimately increase your property value.
5. Going Off-Site for Activities and Entertainment
Not every lease-renewal incentive needs to be about the property. Many renters might like something else that makes their lives better in their current space. A membership to a nearby gym, for instance, is both a nice gift and an added incentive to stay in the area. If this doesn’t seem viable (some people might be offended if you hint that they need to hit the gym!), consider a subscription to a book-box service or a grocery-delivery service.
6. Getting Services to Lower Expenses
You can also consider giving certain services as lease renewal incentives. These may include media services, which means an internet connection and free cable.
Landlords who own huge apartment buildings often qualify for rewards or referral discounts from cable and internet companies. Consult your provider and find out if these discounts can trickle down to benefit certain residents as well. The same goes for any upgrade you might get for free or at a lower price than usual.
If your tenants are in an older age group, they might not want upgraded internet or cable services. What they might appreciate more are laundry and housecleaning services. Even those who live in luxury 3 bedroom apartments for rent will appreciate such services at a reasonable rate.
7. Put Together a Menu of What You Can Afford
If your tenants are worth keeping around, then why not go the extra mile? If you can afford several minor upgrades, or a major one, put all the choices together and present them to the family or individuals. The menu items might include cleaning services, touch-ups, wallpapering, installing a swing, and so on.
This way, you can offer choices that are in your budget and also give tenants the freedom to choose. They just might appreciate this freedom even more than the incentive itself.
Lease Renewal Incentives – The Takeaway
So, how do you decide which could be the right lease renewal incentives to keep your valued tenants around? By offering varied incentives; we are all individuals, after all. Remember, the implementation also counts for a lot; you don’t want to foist a major renovation on their living space until they’ve agreed to it.
Before you make any decisions, be sure to stay respectful, within boundaries, and aware of what your tenants need. Look at your budget as well; weigh the pros and cons, and then go for what seems best. In the meantime, stay courteous and give good customer service to your quality tenants. Let them know how much you appreciate them throughout the year instead of just at lease renewal time!
Source: rentalhousingjournal.com
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