As any landlord knows, finding good tenants can be difficult, so when they do find good renters, they want to do whatever they can to keep them for long-term leases. According to a survey conducted by The Rent Roll, incentives are a strong negotiation strategy for tenants to renew a lease. Here are several that have been proven successful in the past.
In a tight rental market, it may be difficult for a landlord to offer a rent reduction. However, there are other incentives that can be offered that may encourage a renter to remain in a house or apartment. Gift cards to local restaurants, home decorating stores or even grocery stores may encourage the tenant to renew the lease. However, the gift card will need to be worthwhile to the renter, so be sure that the amount offered makes it worth any additional rent that remaining with the least could cost. Another option is to purchase gift cards for luxury items, such as flat screen televisions, blu-ray players or other electronics so that the tenant can choose the brand, make or model that they prefer. Gift cards for such items also eliminate the need for a landlord to keep incentive items in stock.
Another incentive that may encourage a renter to remain at a location is to waive certain fees for the lease period. Pet fees, homeowner association fees or others could be waived at nominal cost to the landlord, but could be considered tremendous savings to the renter. Offering an early lease termination clause may also be a benefit to the renter, especially if they are hesitant to sign long-term due to possible job relocation. Another option is to offer a temporary reduction in rent, such as for the first two months of the new lease as this would encourage the tenant to stay, but would not affect the income of the landlord for an extended period.
Another incentive to encourage tenants to remain is to offer physical improvements to the house or apartment. New paint, appliances or carpeting are often well-received by renters and this type of incentive benefits both the landlord and the tenant. The value of the rental property will increase and a good tenant is more likely to sign a long-term lease if they know the landlord is willing to put money into the property.
Finding a tenant who pays rent on time or who provides routine maintenance around the home is critical to every landlord. Low tenant turnover should be the goal of every landlord, and offering incentives for tenants to sign long-term leases is one of the best ways to reduce turnover and keep tenants returning at the end of each lease period. These incentives will let the tenant know that the landlord appreciates them and, in some cases, will help improve property value for the landlord. In addition to incentives, starting the renewal process prior to the end of the lease, addressing complaints, and offering grace periods for rent are also excellent ways to encourage good tenants to remain.