Tenants Seek Early Renwewal

My tenants keep asking me about the renewal of their lease. It’s still seven months from when their current lease terminates. As a landlord now for 8 years, I have no qualms with my tentant(s) asking about renewing the apartment early. It’s nice to be wanted. However, I am 99.9% sure this is a ploy to figure out the terms of the renewal – e.g. how much I am going to raise their rent – something I am definitely planning on doing since they know as I certainly do, their rent is currently very under-market. What’s best way to deal with this? A few that I have come up with

k9191

in Landlord 10 years and 4 months ago

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brokelin | 10 years and 4 months ago

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cmu – I think that approach is the one that best maximizes profit and peace, and have appreciated it when I have been a tenant and had landlords with that philosophy. I have known others who faced huge increases, and it seems to me that tenants in such a place will not only move more frequently, which entails more costs for the landlord, as you noted, but may be less amenable to given into the landlord’s wishes on the little things we all compromise on in business negotiations – things like graciously tolerating lack of heat and hot water and leaky ceilings when landlords aren’t as fast as a professional manager would be to fix things that need fixing – which good tenants do, a lot – because they are happy that the rent is not raised precipitously, which is a pain because moving is very disruptive and expensive for a tenant.

cmu | 10 years and 4 months ago

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I also think 12% is quite a jump. Maybe since they’re ‘good’ tenants and you want to keep them, you cam make them a better deal? Do you have to get the maximum? Personally, as a landlord for over 30 years, I rarely raise the rent at all on good tenants, figuring the devil you know etc…(and not having to repaint & reshow).

brokelin | 10 years and 4 months ago

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They sound like sensible people – planning ahead to figure out their risk and expenses. Your paranoid actions will drive away your good tenants.

brokelin | 10 years and 4 months ago

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I think 12% is a lot for an increase. But, whatever one thinks, why are you paranoid about telling them what the new rent will be upon increase? It seems to me that you gain nothing from holding this information back. You seem to want them to stay, but to not tell them how much the increase will be until as late as possible – why? – so you can trap them into staying because they haven’t had time to find a place more in line with what they want to pay? What in the world is wrong with you? If your tenants want to move, they will. If you don’t give them an answer as to the new rent and let them renew early if you are in agreement about the rent, they they will likely assume the worst and definitely plan to move. Which seems like a lose for you, as there is the possibility that they are expecting a higher increase, since you won’t say what it is, and you might actually be able to agree on the new rent.

jay | 10 years and 4 months ago

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I see no reason why you couldn’t just state what your intentions are. It is not binding. They will know what to expect. This has nothing to do with your current lease, but the new lease so no dates would change.

daveinbedstuy | 10 years and 4 months ago

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12% isn’t really an awful lot. I would just communicate it to them, like what slopefarm says

slopefarm | 10 years and 4 months ago

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It is not their job to understand your perspective or set aside their self-interest. Nor do you need to set aside yours. The only reasons I can think of to hold off are: 1\. If you think they will be vindictive in some way, or 2\. If you think they will break the lease. Otherwise, i would say something like: We will definitely be raising the rent. The market for this apartment is currently __________ and the market is going up (as have our costs), but if you want to stay, we would rent it to you for _______________. Or you could just ask them why they want to know so far in advance and see what they say. You will learn something about their thinking and motives that way. Even if they run out on you, if you are that far under market, you will make up any lost months in less than a year from a new market-rate rental.

k9191 | 10 years and 4 months ago

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no new terms except higher rent. our costs went up and therefore so will their’s. unfortunately for them, it will be a roughly 12% increase (which will still be under-market). they are great tenants and certainly do not want to lose them, however, they’re not that great as to set aside their self-interest in this situation. to even ask – and persistently – means my perspective is lost on them.

daveinbedstuy | 10 years and 4 months ago

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You could also offer them a shorter lease or simply date the next lease so that it coincides with a better season for you to rent it.

k9191 | 10 years and 4 months ago

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Agree on those aspects, except that if they do decide to leave, my new lease start date is dead of (if not, tail end of) winter vs. end of summer, I think is a lose for me.

resident2 | 10 years and 4 months ago

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Assuming that the terms of a re-newel lease will not change, just the rent amount. I would not get into “negotiating” a new lease now. It is too early. Just brush it off with an “if you keep paying on time and looking after the apartment, there will be no issue with renewing if you want to stay….”. Why are they in such a rush to tie your hand now? Lets face it a lease only ties the Landlord, it does not in reality tie the tenant.

shahnandersen

in Landlord 10 years and 4 months ago

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I think you are being a bit paranoid. If you truly do not trust these tenants, you shouldn’t renew at all. But if you are comfortable with them and want to keep them, why not offer the renewal now? The tenants just want to be sure that they will be comfortable with the new lease terms and will have more than 30 days to find a new place if they are not. What’s the advantage to you to spring the new terms on them later? They seem to be willing to make a commitment now and that greatly benefits you by not having to worry about rerenting the place to people you do not know in a short period of time.

dnk | 10 years and 4 months ago

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    string(3) "dnk"
    ["user_pass"]=>
    string(34) "$P$Bc/fuQ6M6AurKgSr2TPjNRasEkYaWi1"
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    string(28) "dkeegan@laskerfoundation.org"
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Hi, As a landlord myself, I think I’d be game for the early renewal offer. Sure, it allows the tenants to see if you’re planning to raise the rent. But it also allows you to know whether they’ll stay for the rent increase. If they plan on leaving, you get more time to find a new tenant at market rate. Seems like a win for both you and the tenant, but maybe there’s an angle that I’m missing.