Whether your lease agreement lasts for one month, six months, or a year, you have to eventually decide whether you’re going to renew your tenant’s current lease. Sometimes, a tenant can be so great or terrible that the answer is clear. In other cases, it can be difficult to decide. If you’re stuck on the fence, let’s take a look at some questions that will help you decide whether you should renew your tenant’s lease.
Does Your Tenant Pay Their Rent on Time?
A tenant that can’t afford to pay their rent in full or has a history of not paying on time is frustrating to deal with. The late payments can make budgeting and planning more difficult, especially if you don’t own many occupied rental properties. If they have difficulty paying you on time and in full, you may want to consider not renewing their lease. Alternatively, a tenant that pays their rent completely and on time is not something you want to let go of so easily.
Do They Respect Your Property?
As a property owner, you have to be OK with people using your property and occasionally getting it dirty. However, if your tenant is outright disrespectful, damages your property, leaves it in disarray, or doesn’t work to maintain it, you don’t want to deal with that for long. Additionally, if your tenant doesn’t tell you when things need repairs and lets the problem worsen, you may want to reconsider the lease. While there’s no such thing as a perfectly clean and sterile tenant, you should have someone living on your property that respects the space.
Do They Abide by Your Policies?
There are likely terms and policies in your lease agreement, and, in some instances, tenants will outright disobey the agreement they signed. They may have unauthorized pets, smoke in no-smoking areas, or make noise past quiet hours. Whatever the case may be, ignoring the agreed-upon rules isn’t something to ignore. If a tenant doesn’t abide by the policies in place, that’s a perfectly valid reason not to renew their lease.
Are They Generally Reliable and Easy To Work With?
If your tenant has a clean record, abides by the rules, respects your property, communicates well, and has the financial stability to continue living there, you have a fantastic tenant. Good tenants aren’t always easy to come by, so if you find one you get along with, don’t be so quick to let them go. Alternatively, working with a tenant that’s difficult to please or communicate with shouldn’t be something you should deal with for any longer than you absolutely have to.
How Do the Neighbors Feel About Them?
While this isn’t a deciding factor on its own, take a second to consider how the neighbors, or the neighborhood members, feel about the tenant. The answer you should hopefully have is at least neutral. If they’re not so keen on the tenant, ask yourself why. Is the tenant disrespectful, rowdy, dangerous, or cruel? Or is it simply a clash of personalities? If it’s the latter, then that’s something the tenants will have to figure out on their own. However, if the people living near your tenant aren’t fond of them because they disturb their peace, you might want to toss around the idea of not renewing their lease.
Are You in a Financial Position To Handle a Vacancy?
There’s a lot of work that goes into maintaining a vacant rental property, and the longer it’s vacant, the more money it’s going to cost you in the long run. In addition, a vacant property is subject to theft, squatters, mold, and several other risks. Before you decide not to renew their lease, ask yourself if you have the money to protect your property and keep it clean without a tenant’s help. If you aren’t in a financial position to care for and maintain it, you may want to hold onto that tenant a little longer.
Are You in a Financial Position To Find a New Tenant?
Maintaining a vacant property costs money, and finding a new tenant costs money as well. You must perform screenings, market your property, host open houses, and more. Searching for new tenants costs more time and more money—again, the longer the property is vacant, the more this is going to cost you. If you don’t have the money to find a new tenant or handle a vacancy, the smart move is to keep your tenant until you’re in a better financial position.
What Is the Current Demand for Rentals in Your Area?
Before you can fully decide if you have the funds not to renew a tenant’s lease, you have to take a look at the current rental demand in your area. This information will help you determine approximately how long it will take to find a new tenant. The lower the demand for local rentals, the longer it’s going to take you to fill that vacancy. You want to make sure you have enough funds to carry you and your property for the long haul just in case things take longer than expected.
Do You Have a Good Reason Not To Renew Their Lease?
As a property owner, you don’t have to tell your tenant why you didn’t renew their lease. In fact, you don’t technically need to have that good of a reason at all. As long as it doesn’t violate Fair Housing laws, you can refuse to renew a lease for plenty of reasons. However, just because you can doesn’t mean you should. Remember, even though it’s your property and your business, it is someone’s home and shelter, which you shouldn’t take lightly. Whatever your reason is for not wanting to renew their lease, ask yourself if it’s worth taking away their housing.
Hopefully, these questions can help you decide whether you should renew your tenant’s lease and maybe help you make future renewal decisions. If you’re still having trouble deciding, are struggling to find new tenants, or need to evict a current one, let Excalibur Homes help. We have property management companies located throughout the South, all staffed with experienced property managers dedicated to making your life as a property owner a little easier.
