Renewing lease agreements keeps your income stable and consistent. It allows you to avoid expensive vacancies and all the work that comes with tenant turnover, from painting to maintenance to marketing. When you can streamline the process of renewing a lease, there’s less of a chance that you lose a good tenant.
As Nashville property managers, we have the process down to a science. We have embraced and improved upon many of the best practices that allow us to renew lease agreements efficiently and effectively. We’re sharing those best practices with you here, because with the right systems in place, lease renewals can become a predictable and manageable part of your rental property ownership.
Start the Renewal Conversation Early
One of the most common mistakes landlords make is waiting too long to start the lease renewal conversation. Your lease agreement will be precise about how much notice is required if a tenant is expecting to move out of your home. Get ahead of that date by discussing their plans sooner.
We recommend that you begin the renewal process 60 to 90 days before the lease expires. This is to your benefit and your tenant’s benefit because:
- It provides the tenants with more time to consider their options. They’ll likely either know for sure that they’re staying or they’ll take a look at what else is on the market before making their decision.
- It provides you with time to make plans for marketing and renovations if you know for sure that your current tenants will be leaving.
- You’ll have some flexibility for rent negotiations and lease negotiations. You’ll want to give tenants time to think about the lease renewal you’re offering.
Make a calendar note for yourself two or three months ahead of the lease’s end date. Then, send a friendly reminder email or letter indicating that the lease will be ending soon and ask if the tenant is interested in renewing. Include a deadline for response to encourage timely communication. This sets your process in motion without the anxiety of a time crunch or any uncertainty about what’s going to happen at the end of the lease term.
Use Automated Systems or Property Management Software
There are a lot of good reasons to work with a Nashville property management partner, and we are always talking about those reasons. The technology we provide is an excellent benefit to professional management. This is especially useful when it comes to tracking tasks and deadlines.
Such as lease renewals.
Manual tracking of lease start and end dates and tenant communications can quickly become overwhelming, especially if you manage multiple properties. Our automated systems allow us to receive alerts when leases are nearing their expiration dates. They are able to auto-generate renewal offers and new lease agreements. We can track tenant responses and keep track of any correspondence and documentation.
Any rental property owner can invest in property management platforms themselves. You can look for programs from services like Buildium, AppFolio, Rentec Direct, and TurboTenant. All of these offer lease renewal tools that simplify the process. Even free tools like Google Calendar or Trello can help you stay organized if you’re managing a small portfolio.
However, if you don’t want to invest in new technology or you’re not sure you have the capacity to integrate even tools that will help you streamline your systems, property management can be your best solution. We already have these things in place, making lease renewals easy.
Review Nashville Market Rents and Adjust Accordingly
The new rental amount will be a big part of your lease renewal process. Before offering a renewal, research current rental market conditions in Nashville. Is the rent you’re charging still competitive? Typically, you’ll raise the rent when renewing the lease. It’s important to be strategic, however, because retaining your existing residents is an important part of protecting your earnings. Here’s what to consider when you’re deciding how much to raise the rent at renewal time:
- What are properties similar to yours renting for in your neighborhood?
- What are the vacancy times? Rental homes that are on the market and unoccupied for too long may be asking too much in rent.
- How is inflation affecting the rising costs of maintenance?
- Have these been good tenants who pay rent on time and take care of the property?
A rent increase of 3–5% annually is typical, but excessive increases can drive tenants away. Communicate any changes clearly and justify them with data if needed. Most tenants in Nashville expect their rent is going to go up. However, you don’t want to chase them out the door with a higher increase. If it is still cost-effective for them to stay with you and they’ve had a good rental experience, they will likely renew the lease and contribute to the consistency your investment needs.
Keep It Simple for Nashville Tenants
One of the easiest ways to streamline renewals is to make the process as simple as possible for your tenants. You can make it easy and convenient by sending digital renewal forms via email or tenant portals. Offer them the option of e-signatures to eliminate printing and mailing. Always provide clear instructions and timelines.
The more barriers you remove, the more likely tenants are to renew without friction.
Flexibility is also a powerful tool in retaining tenants. Not everyone wants a 12-month lease when their initial term comes to an end and it’s time to think about what’s next. You might want to offer options such as a month-to-month lease, which might earn more rent every month. You could also offer a renewal that spans six or 18 months, depending on tenant preferences. Offer incentives for longer renewal terms. A lease agreement for the next two years, for example, locks in your current rent and protects you from vacancy for an extended period. That’s pretty enviable.
Communicate Clearly and Professionally
The tone and clarity of your communication can influence whether a tenant renews. Our suggestions include:
- Using professional language that’s friendly and supportive. Even if your tenant is thinking about leaving, you want them to leave on good terms and by meeting all of your move-out expectations.
- Clearly outline any rent changes, policy updates, or changes in terms as your tenants prepare for their new lease period.
- Include important dates such as the exact end of the lease, the tenant’s deadline for a response, and the date when all the new lease terms go into effect.
A well-written lease renewal letter or email should eliminate ambiguity and establish a smooth transition.
Incentivize Lease Renewals for Nashville Rentals
Reduce tenant turnover and associated costs by offering strategic incentives to encourage lease renewals. One of the most effective methods is keeping those rental increases reasonable, as we’ve discussed. By keeping rent competitive for renewing tenants, landlords can show goodwill and reduce the likelihood of tenants seeking cheaper alternatives.
Another popular incentive is the inclusion of upgrades or improvements to the rental unit. This might include new appliances, updated flooring, fresh paint, or enhanced amenities like in-unit laundry or smart home features. These upgrades not only increase tenant satisfaction but can also raise the long-term value of the property. If you lose your current tenant, you’ll have to invest in some upgrades and updates anyway. Why not make this a point of negotiation in order to keep a tenant? If existing tenants have requested something specific, like a professional carpet cleaning or a new microwave, consider it.
Gift cards, free cleaning services, or a one-time amenity credit, such as a discount on a local gym membership, can represent appealing non-monetary perks. These relatively low-cost gestures often go a long way in showing appreciation and creating a positive landlord-tenant relationship.
Open communication and good service are foundational. Proactively reaching out to discuss renewal options, maintaining a well-kept property, and quickly addressing repair issues increase tenant satisfaction and loyalty.
By combining financial, service-based, and lifestyle incentives, we believe Nashville rental property owners can significantly improve their lease renewal rates, reducing vacancy and turnover costs while creating stronger, longer-term relationships with tenants. What matters most is coming up with an incentive that’s personal and unique, and most likely to meet the needs and priorities of each tenant.
Document Everything in Your Renewal Process
As with all things related to property management, documentation is key. Keep records of:
- Renewal notices and responses.
- Lease agreements and signed renewals
- Communication between you and your tenants
Digital documentation keeps you protected in case of future disputes and makes it easier to retrieve information when needed.
Streamlining lease renewals is about more than avoiding hassles that can come when you’re not sure if your tenant is leaving or staying. It’s also about building better relationships with tenants and protecting the recurring rental income that’s making your investment property in Nashville profitable.
By implementing clear processes, using the right tools, and supporting open communication, you can keep great tenants longer, reduce vacancies, and boost your property’s profitability.
Do not wait until a lease is about to expire. Build a system today that takes the stress out of renewals and turns them into a seamless part of your property management routine.
We can help. If you need some support during the lease renewal process, please contact us at Apex Ventures, Inc.
