How long to wait before offering rental lease renewal?

[Peter J.]

Hello BP,

I have a pair of exemplary tenants that started renting from me in late August 2019. Their current lease ends on July 31, 2020. Given their status as exemplary tenants to-date, I'm inclined to send them a note stating that I'm willing to renew their lease for another year at the same rental price - keeping their rental rate flat year-over-year.  

My logic: they are a well-educated, quiet, and career-oriented couple. They have paid their rent early every month. The math works out where if I were to let them leave and open the unit for the potential for new tenants - even a month's worth of vacancy would require a $200+ per month increase in the rent to make up for that month's worth of vacancy.

My questions: 

1) Is there anything wrong with offering a renewal for a 12 month lease during the fifth month in an existing 12 month lease? (i.e. their current lease is set to expire July 31, 2020 and I would offer a renewal from August 1, 2020 to July 31, 2021.

2) Aside from a reduction in supply in the area and the unlikely potential for a sudden increase in average rental rates in the neighborhood, are there any drawbacks to an early renewal proposal?

3) When do experienced landlords typically offer lease renewals to great tenants/ clients?

Thank you for your time and help!

[Nathan Gesner]

I offer a renewal 60 days in advance of termination. They have 30 days to accept the offer and submit to an inspection. If all looks good, I renew their lease during the last 30 days of their current lease.

I think you're awfully premature to label them the perfect tenant. It's only been five months. In three months they could lose a job, be transferred, have a health issue or death in the family, break up, or a myriad of other things. Enjoy what you've got and let it happen.