over 2 years ago
Why renew the lease on an investment property?
It may seem obvious to some, but for many Landlords and Tenants they can’t seem to understand the reasoning behind a lease renewal.
It’s not just a quick process that property managers do, it’s a calculated thought out task that can benefit both the Landlord and Tenant.
Let’s look at the Landlord’s side of things first, from a Landlords point of view if we are talking about a property that is purely used an investment you want a good tenant to stay long term and not move out after a year or so. This saves the landlord money as well, as tenants vacating becomes costly with agents leasing fees, advertising and possibly vacancy.
This is where discussing the lease renewal with the existing tenants is so important, if we can secure another year or more with the tenant and possibly increase the rent* this is a great result for the landlord. (*Depending on market conditions)
The landlord will then have the security of knowing the tenants are planning on staying in the investment property and can factor in repairs or renovations for a year or two away. Financial institutions also prefer investors who have lease agreements in place vs leases that have expired and are on a periodic lease agreement more commonly known as ‘month-to-month’ arrangements.
For the Tenants side of things, what could be more frustrating then moving into a property making it your home and being told the Landlord or a member of his family wants to move in? This is what can happen and a whole range of other notices can be served to tenants not on a fixed term lease agreement.
It can also be costly if Tenants haven’t planned to move house and then have to factor in costs of relocating, new bonds and possibly a change in location if there are limited properties available.
Most tenants we speak with would prefer to stay in their existing property with minimal annual rent increases than have the added stress of having to find a new home every year.
If you have any comments please feel free to share them with us, we love hearing your thoughts.
It’s not just a quick process that property managers do, it’s a calculated thought out task that can benefit both the Landlord and Tenant.
Let’s look at the Landlord’s side of things first, from a Landlords point of view if we are talking about a property that is purely used an investment you want a good tenant to stay long term and not move out after a year or so. This saves the landlord money as well, as tenants vacating becomes costly with agents leasing fees, advertising and possibly vacancy.
This is where discussing the lease renewal with the existing tenants is so important, if we can secure another year or more with the tenant and possibly increase the rent* this is a great result for the landlord. (*Depending on market conditions)
The landlord will then have the security of knowing the tenants are planning on staying in the investment property and can factor in repairs or renovations for a year or two away. Financial institutions also prefer investors who have lease agreements in place vs leases that have expired and are on a periodic lease agreement more commonly known as ‘month-to-month’ arrangements.
For the Tenants side of things, what could be more frustrating then moving into a property making it your home and being told the Landlord or a member of his family wants to move in? This is what can happen and a whole range of other notices can be served to tenants not on a fixed term lease agreement.
It can also be costly if Tenants haven’t planned to move house and then have to factor in costs of relocating, new bonds and possibly a change in location if there are limited properties available.
Most tenants we speak with would prefer to stay in their existing property with minimal annual rent increases than have the added stress of having to find a new home every year.
If you have any comments please feel free to share them with us, we love hearing your thoughts.