Tenant turnover can cost you from $1000 to $5000 per vacant unit. In the Bay Area, the costs are likely to be at the high end of the scale.
That figure includes tenant screening, unit cleaning, and any mortgage payments. What it doesn't include is the most valuable resource of all: your time.
When you find a good tenant, it's worth going the extra mile to keep them around. That means dealing with lease renewals. Not only will they save you time and money in the short term, but they also have clear benefits for your long-term investment strategy.
So how do you navigate lease renewals in California? Read on for some top tips from local experts.
You know it's in your best interest to cut down on tenant turnover. But have you considered that consistency and stability are in your tenants' best interest, too?
Your tenants have likely settled into your unit, and may not need much encouragement to stay. Make them feel welcome by reaching out to them proactively and personally 90 days before the end of their current lease.
This gives your tenants time to think about their options. It also shows them well in advance that you're open to continuing your relationship with them. Nudge them into thinking about renewing before they start thinking about moving on!
Do Your Research
Of course, it isn't always that straightforward. As market rents increase, you'll need to ensure that you continue to receive a good return on your investment. Your tenants' circumstances might also have changed since they signed their initial lease.
You'll need to negotiate any alterations to the lease with your tenants. The best way to do this is to approach it in good faith, with clear and up-to-date information supporting your decisions.
To decide whether all this is worth your time, you'll also need to have a sense of your tenant. Do they pay rent on time and in full? Have they treated your property well?
These are all important things to be sure of when deciding whether to make concessions to keep a tenant in situ.
Incentivize Lease Renewals
It's common for landlords to offer incentives to new tenants. It can be an effective form of advertising that minimizes tenant turnover time. But what about existing tenants?
Offering tenants a month of free rent if they renew their lease might seal the deal if they aren't sure whether to stay. With rents on the rise in California, an incentive can make all the difference to a tenant!
Of course, this approach can affect your income if handled carelessly. But the costs of a rent-based incentive are likely to be less than the costs of tenant turnover. They'll also be easier to predict and account for ahead of time.
California Property Management
If you're a real estate investor in the Bay Area, you're likely to be incredibly busy. Managing property and lease nrenwals effectively takes time you might not have. That's where Blue Line Property Management comes in.
We're here to help you keep your property in great shape, so you can focus on what matters to you. Contact us today to discuss how we can support you all the way to success.