The rate for lease renewals is at an all-time high of 58.3%. It's driven by factors such as increasing rent and mortgage rates and a decrease in the number of available units.
Landlords may think that it's always the right call to keep a tenant because it keeps the rent rolling in. What they forget is that there are times when it may be best to empty out your unit.
Read on for reasons why it might not be a great idea to renew a lease.
You're Renovating, Selling, or Not Renting the Property
You may one day decide that you no longer want to rent out your investment property. You may want to sell it, move in yourself, or turn it into a vacation home.
You may also want to renovate or upgrade the property, whether it's to make it better for future tenants or for yourself. This can take months of work that may require emptying out the unit.
All of these situations may cause you to forgo lease renewals. Having a tenant in the building makes it impossible for you to achieve these new goals.
You Have Issues With Your Current Tenant
The tenant screening market is worth almost $5.3 billion. It keeps you from having your property filled with anyone who would:
- Cause property damage
- Fail to pay rent
- Get complaints from neighbors
- Fail to follow the lease agreement
- Engage in illegal activity
When they do get in, there are two major ways to deal with it. Evicting a problem tenant requires you to follow a complex legal process. An easier option is to not renew their lease.
Communicate with them as part of the lease enforcement process first. See if you can reach an understanding, such as setting a rent date that works better for them. If your words fall on deaf ears, they need to find a new place to live.
You Want a New Tenant
You might not want to keep even the best-behaved tenants in the world in your rental property for too long. It affects the amount of rent you're allowed to charge them.
Finding new tenants is an important part of property management that shouldn't stop even if your property is occupied. If you find a new one, you might not want to renew that existing lease. They may have better qualities or be willing to pay more.
Where to Get Help with Lease Renewals
Lease renewals keep the rent coming in, but they may not always be the best idea.
You won't be able to sell, renovate, or live in your property if there's already a tenant in it. Problem tenants are common without proper screening. Terminating their lease is easier than going through the complex process of evicting them.
Keeping a tenant in a property for too long also prevents you from raising the rent. Don't be afraid to terminate a lease to let a new one in.
Remax Haven Realty is your choice for Cleaveland property management. Contact us today.