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3 Best Practices for Renewing Tenant Leases

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tenant lease

The rental lease agreement is probably the most crucial landlord document of all, because it spells out your rights as well as those of the tenant regarding the rental property.  And if you’re lucky, you will sometimes have tenants that want to remain in the apartment after the expiration of the initial tenant lease term.  In this case, you have 2 options: allow the lease to expire which will put the tenancy in a month-to-month scenario, or renew the tenancy with a new 12-month lease.  Obviously the latter is preferred, and as such what follows are 3 best practices for executing the renewal.

First and foremost, make sure you revisit your existing lease, and make any necessary revisions to the document prior to executing it.  This is a good opportunity to remove language that is no longer applicable, alter the delineation of responsibility, and/or raise the rent.  Also, remove any language around auto-renewals, if applicable.  Auto-renewals are tenant leases that automatically renew at the end of the initial lease term, unless the tenant provides written notice to terminate the extension.  Not only are auto-renewal provisions prohibited in many states, but they can also undermine your efforts to formally renew leases at the end of their term because it’s easy to forget the auto-renew dates.  Once you’ve revised the language to your liking, formalize everything by executing a fresh 12 month tenant lease that reflects these revisions.

Second, always re-inspect the apartment at the time of the tenant lease renewal.  This will allow you to address minor problems before they become something bigger.  You might also wish to provide certain upgrades at this time for particularly good tenants, such as new appliances.  Do the walk-through in the presence of the tenant so there is no ambiguity or questions down the road.

Third, ask the tenant to update the information on their rental application, if applicable.  For example, make sure things like a new phone number, new job, and any revised emergency contacts are documented.  Additionally, if the tenant has a new occupant in the apartment, capture this person’s information as well (and of course, do a background check on him or her, add him or her to the lease, and consider increasing the rent).

Simply following these 3 simple tips will clearly help your investing business, as you’ll be able to revise the tenant lease language and raise rents easier, stay on top of repairs and maintenance, and keep apprised of any changes in the tenant’s situation or information.  So take this post to heart, and you will be better off for it – guaranteed!

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