Lease renewals are a great way to reduce overall costs and increase occupancy rates for your apartment community. Property management data shows that the rate of lease renewals is estimated to be quite high for this year, so it’s time to take advantage of this now. There are several things you can do to improve your lease renewal process to make it simpler and more effective. We’ll discuss some of these ways in this blog.
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Property Management Data: Lease Renewals are Up this Year
Property management data from this year shows that lease renewals are incredibly high. In previous years from 2010 to 2019, the average lease renewal rate was about 51.5%. However, during the COVID-19 pandemic, these rates have continued to rise. This year, the lease renewal rate was closer to 58%. As you can see, this is significantly higher compared to previous years.
There may be several reasons for this. For instance, concerns about meeting with several property managers to tours on new apartments being a health risk for COVID and other germs. Another potential reason is that moving can disrupt not only their lives, but their work, as many people are now working from home, whether full-time or on a hybrid work schedule.
Knowing that lease renewal rates are high right now, it’s important to strategize to take advantage of this trend. Remember, lease renewals reduce costs for tenant acquisition, marketing, and vacancies.
How to Improve Your Lease Renewal Process
There are many strategies you can use to increase lease renewals. Of course, the first step is to decide which tenants are worth renewing the lease with. Keeping bad or unreliable tenants around can be more hassle (and cost) than it’s worth. Therefore, first decide who is a good candidate. People who haven’t been late on a payment and don’t have any complaints against them are a good place to start.
Multifamily data also shows that the earlier you send a lease renewal, the better. Of course, you don’t want to send one the day after someone signs a new lease, but you do want to send it before the tenant is likely thinking about where to move to. Sending about 120 days in advance of the lease end is a great time to catch them before they’re looking at your competitors.
Don’t forget to incentivize lease renewals. Some people may be actively looking at other apartments. Plus, everyone wants to feel like they’re appreciated, especially valuable tenants. Providing rewards for renewing is a great way to keep around the tenants you like. These depend on your community, but some common ones include providing them with a free reservation of an event space on the property, giving them a deal on rent, or even (for very reliable tenants) giving them their security deposit back if they renew their lease.
Some other things you can do that may increase renewal rates include making capital improvements where appropriate. In a similar vein, make sure that maintenance requests are taken care of promptly, particularly for those who are about to receive a renewal notice.
Multifamily Data from Apartment Data Services
When you need apartment market data, contact our team at Apartment Data Services. We offer comprehensive reporting on your multifamily market, including information about your competition, multifamily construction news, and other key things to help you make decisions about your property. Our team contacts every property in our database monthly to provide you with the most accurate and up-to-date property management data available. Get in touch now to get a demonstration of our services.