If you have high-quality tenants in your rental properties, it’s important to keep them there. Here is everything you should know about the lease renewal process in Arizona.
High-quality tenants are the cream of the crop when it comes to leasing out rental properties. These are the individuals you don’t have to worry about. They pay rent on time, care for the property as if it were their own, and report the need for repairs as they happen.
High-quality tenants are reliable – and you want to keep them. Here’s what you need to know about doing just that when it comes to your Arizona lease renewal.
Lease Renewal Process in Phoenix, Arizona
Different states have different laws when it comes to a rental property lease renewal. In Arizona, a lease will automatically renew if proper notice isn’t given by the landlord or the tenant at least 90 days before the end of the lease term.
For those who have tenants that they want to keep, it seems like an effortless way to make it happen. And, for the most part, it is. Though, keep in mind that unless you go through a new lease signing, the terms of the old lease – including the rental amount – will remain the same going into the next year.
A downfall of this law is that you have to stay on top of it – especially if you have bad tenants. If you miss the deadline you could very well be stuck with them for another year unless you have changed your lease to go month to month upon expiration.
To make sure everything runs smoothly so you can keep the high-quality tenants and weed out the bad ones, you need to approach your tenant at least 3 months prior to the end of the lease. Talk to your tenants and see if they would like to renew the lease. It is best to do all of this correspondence in writing. If they agree to stay, you don’t really need to take any other steps as long as you are keeping the lease terms the same. If you are choosing to increase the rent, you will need a new lease agreement with adjusted lease terms.
And, of course, written notice of non-renewal should be provided to the tenants you don’t intend to have stick around.
Why the Push to Keep Your Tenants?
You may be thinking – There are many potential tenants out there looking for places to rent. Why not just find another if the tenant doesn’t want to stay? And, well, you could just find someone else. But there are some great benefits to keeping the good tenant you have.
- There is no need to clean up the property, get it ready for showing, market it, attend showings, go through the tenant screening process again, and so on. Being between tenants can often be stressful for landlords.
- Vacancy rates are real – and they can hurt your bottom line. There may very well be a lot of people looking for rental properties, but who is to say they are looking for your rental property? The time of year, the rental market, and other factors will also play a role in how fast you will get your vacancy filled.
- It is not always easy to find great tenants. So when you find them – you want to keep them!
Ways to Get Your Tenants to Renew Their Lease
When you have good tenants, you want to entice them to renew their lease. Not only is it a struggle to try to find new tenants – and the whole process that goes along with starting over – but there is also no guarantee that your next tenants will be as great. Therefore, when you do have those high-quality tenants that you’d love to keep, sometimes it pays to give a little extra to encourage them to stay.
To convince your tenants to sign a lease renewal, you could:
- Offer incentives, such as a discount on monthly rent payments or a discount on the first month’s rent.
- Throw in a property upgrade or much-needed renovation.
- Offer a gift card for a local dining spot, grocery store, or home store.
Though just as you enjoy certain tenants, they enjoy having a landlord they can trust and count on. So taking steps to be proactive and responsive with maintenance as well as keeping the lines of communication open are great ways to make tenants want to stay.
Lease Renewal Process
As discussed, to renew a lease in Phoenix, Arizona, approach your tenants at least 3 months before the lease is up to see if they want to renew. Make sure this is done using written communication, such as sending an email or letter. This letter should include any proposed changes for the upcoming lease and include new lease dates.
If the tenants agree to the terms and want to renew their lease, draw up the new agreement with the new terms. You can send this to the tenant via email for digital signatures. Or, it can be done in person – whatever your preference. Just note that the easier it is for the tenant to sign the lease and get it back to you, the faster you will have confirmation that the tenant is locked in for another year.
How a Property Management Company Can Help!
Property managers can help you keep high-quality when it is time for a lease renewal. Like we said, when you treat your tenants well, they will want to stay. And a good property management team is efficient and effective at increasing rents while incentivizing tenants to stay while also taking care of the property. At Real Property Management Evolve, we offer professional, quality service and prompt communication. It is what makes us the best property management team around.
All of this keeps tenants happy and it keeps renewal rates high.
Finding high-quality tenants can be tough. Keeping them after their lease is up can be even tougher. But, taking the right steps – such as managing the property well and hiring a property management company – can make the idea of lease renewals a reality.
If you are getting ready to approach your tenants about a lease renewal, remember to do so in writing and state any additional terms. If accepted, send out the new lease and make it easy for the tenant to get the signed lease back to you.
Or, why not just let a Phoenix property management team handle it all for you?