In this week’s article, I tapped into Lantana’s expertise again to discuss an underrated question: Should you renew that lease when it’s expiring? Thank you to Angela Valdez for her continued contribution to providing our readers with valuable insights.
Many owners think leases should be automatically renewed to keep the properties occupied. But the answer is actually rarely obvious.
Good renewal decisions start early. Your property manager should begin the review 60 to 90 days before the lease expires. No single factor settles it. The goal is to look at the whole picture and answer one question: is this tenant worth keeping? That question is not always easy to answer.
Here’s what should be included in the review:
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Payment history: This is a critical factor. It indicates whether your monthly rent check will be reliable with this tenant. Does rent show up on time? Watch for late notices and repeat slow payments.
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Work order history: Were maintenance requests fair? Look for unrealistic demands and any sign of tenant-caused damage. If a tenant constantly requests repairs or is difficult to work with when resolving work orders, it is a red flag for whether the tenant is worth keeping.
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Property condition: Inspect the home. Check how well it’s kept and look for damage, mess, or lease violations (such as unauthorized resident or pet).
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HOA compliance: Review violations, complaints, and open issues. One violation rarely matters. Repeat problems, poor communication, or a refusal to cooperate all count.
Weigh those factors together, and the picture usually gets clear. A tenant who pays on time, cares for the home, communicates well, and causes no major headaches is a tenant worth keeping.
If the property manager puts a reliable tenant in the property to begin with, chances are that renewal is the right call. This goes back to the cornerstone of our investment philosophy: and work with a property manager who is skilled at . And you can expect more renewals and minimum vacancies.
If a renewal, at what rate?
Pricing should follow the market. Pull current rental comps (especially the current competing rental listings) to see if the home can support a higher rent. If it can, a raise makes sense. If it can’t, holding rent flat is often the wiser play. A strong tenant is worth more than a small bump, and a vacancy is expensive.
Lease length deserves a thought, too. Twelve months is the standard for good reason. Sometimes a tenant asks for longer or shorter, and that changes the math. Longer renewals usually carry the same rate as a standard year. Shorter ones should cost more, because frequent turnover drains your money and your stability.