Tenant Renewal- How to avoid month to month in exchange for fixed

[Marcus MacDonald]

Hello,

I have a tenant renewal coming up an it’s my first one. My lease has a month to month term, which can be terminated with 30-day notice. I am worried about my tenants leaving me in the middle of winter when occupancy rates and move ins are at lows. Can you tell me what your experience has been with this? 

Also, if rental rates sky rocket, do you increase rents to marketable levels or by a certain amount?  I know state legislation affects everyone in a different way, but curious to see what your process is. I am trying to make an equitable situation for me and my tenant. 

I appreciate the help and advice! :) 

Thank you,

Marcus

[Drew Sygit]

@Marcus MacDonald think outside the box!

We don't do MTM leases for new tenants. About 15% of current tenants inquire about renewing with a MTM when their current lease is up. IN OUR LEASE ARE OUR RENEWAL TERMS:

1) A standard 5% increase unless they contract 60 days ahead of time to negotiate otherwise.

2) If they want a MTM renewal it's a10% increase AND if they are there October 1, the lease requires them to stay until February 28.

As already pointed out, it's not uncommon for tenants to break a lease and vanish without warningly or. There's a direct correlation with this and the tenant demographic - likelihood increases with lower demographics. It's not that difficult to deal with though.

Overall, having renewals built into the lease supplemented with our automatic email reminders we send, leads most tenants to cooperate. Think of the 80/20 rule, 80 percent will follow and be s relatively easy to deal with. The other 20 percent will be difficult no matter what you do.