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Being a landlord in the San Diego, CA area can be exceptionally rewarding. There are a lot of investment opportunities to jump on and it can be a great way to make a living. However, having tenants can also be stressful and overwhelming - especially when it comes time for lease renewals.
As you know, leases with your tenants don't last forever. You have major decisions to make when your lease agreement does come to an end. Do you know what they are?
To make sure you are being a responsible landlord, keep reading below to see what you need to know about lease renewals.
Do You Have Good Tenants?
If you're an experienced property owner, chances are you have conducted a tenant background check before letting them move in. Even if they have a clean criminal history though, have they been good tenants during your agreement?
Before creating a new lease, be sure to consider if your current tenants have been paying their rent on time, keeping your property in good shape, and being respectful with the people around them. You don't want to make the mistake of renewing a lease with tenants that are going to give you trouble down the road.
On the flip side, if you love your tenants and want them to stay, try your best to maintain that great relationship with them. After all, it's more expensive to attract new tenants than it is to keep your current ones.
Rent Collection Payments: Will You Increase Them?
Rent is another item on your checklist to consider when creating a new lease. For instance, if market conditions have changed since your first lease agreement, then it might be time to slightly increase rent. That might not be a problem for you of course, but you do run the risk of losing a great tenant.
If you do decide to increase rent during the lease renewal period, be sure to give your tenant plenty of notice. They might not agree which means you will have to put your property back on the market.
When Should You Send The New Lease Over?
As mentioned above, timing is important. If you send over your new lease to your current tenants too late, they might not agree and you suddenly have a vacancy to fill.
With the new agreement, signing a lease needs to be completed on time. If you miss the deadline to renew your tenant's lease, then the rental agreement automatically converts to a month-to-month rental lease.
It's also important to pay attention to when your tenant gives you written notice of their departure. Failure to comply automatically renews the lease agreement. That means your tenants are obligated to pay for future rent payments for the entirety of the agreement.
What Else Should You Know About Lease Renewals?
When generating a new lease agreement for your current tenants, we covered the importance of keeping good renters, new rent payments, and why the timing of it all is crucial. There is still more to consider though when creating a new lease. A few items to think about include:
- Security deposits
- How to pay rent going forward (if you weren't happy with the current method)
- Renters insurance (is it required?)
- Pets in a rental property
For a deeper dive on renewing a lease, check out some key takeaways of lease renewals.
Hire Property Managers Today
We hope we shed some light on lease renewals and how the process is a little more complex than signing a piece of paper. We understand the responsibilities that come with being a landlord and how it can be a full-time job. If you want a profitable investment without the stress and hassle, then consider hiring a property management company today.
Contact us today at Penny Realty, Inc. in San Diego, CA. You can count on us to rent fast, find quality tenants, and maximize your revenue.
