Whether you’re a new or accidental landlord or an experienced one in the industry for years, it’s always a great feeling when you get to renew your tenant’s lease in Fort Walton Beach, Florida.
Why is this such an exciting time for a landlord?
Well, it takes the stress and anxiety out of dealing with a vacant property and spending money to acquire a new high-quality tenant to start earning an income again.
Landlords strive to get their tenants to renew their leases to save time and money while maximizing their ROI. However, with all the hard work put in that’s now paying off, you may be lost when it comes to what you actually have to do to renew the lease.
Fortunately, All American Realty has a simple five-step solution to get your tenant under a freshly signed lease and living in your Fort Walton Beach rental property for another year.
Steps to Renew a Tenant’s Lease
When you first acquired your tenant, you probably went through a long process of tenant screening, calling references, collecting deposits, and sitting down to sign the lease. This can take days to even weeks.
Now that it’s time to renew your tenant’s lease, the process is a bit different but much easier overall. Below are the steps to take to successfully renew a lease with your tenant.
1. Get Confirmation of Renewal
It isn’t always a given that your tenant plans to renew their lease with you. Maybe they plan to move to another town or state, or they want to get a larger space for a growing family. Either way, you must get a confirmation whether or not they wish to renew.
It’s a good idea to reach out to your tenant at least 60 days before the lease terminates to ask what their plans are. If they decide not to renew, this gives you plenty of time to prepare your finances and start searching for a new tenant.
However, if they do confirm they will renew the lease, these two months allow you to prepare the new lease and work out any additional details in a calm, unrushed manner.
2. Negotiate Rent and Terms
When you renew a lease with a tenant, it offers you a chance to renegotiate some of the current terms, including the price of rent. This can go two ways, actually.
If your tenant is on the fence about renewing their lease, you can take this opportunity to incentivize them by decreasing the rent a bit. However, we only recommend doing this if they are a great tenant who you really want to keep and it doesn’t affect your finances too much.
The second option is to increase the rent to keep up with the current rental market. If you see the area’s prices rising, you may want to match your property with them and then explain to your tenant why the price increased.
You may decide to keep the rent the same but renegotiate other terms. For example, your tenant may want to get a pet soon, but you didn’t allow pets at first. Now that you know the tenant is responsible and takes care of the property, you could overturn that decision.
But, how do you know how much to increase rent, or if you should at all? A good place to start is with a free rental analysis.
3. Rewrite the Lease
Once you and your tenant have agreed on any new terms, it’s time to rewrite the lease. This is much simpler than writing a brand new lease as you just have to change the start and end date and any other details such as rent price and amend any clauses.
4. Collect Deposits (if needed)
If you decide to increase the rent and your tenant has agreed, then you might need to collect additional deposits to make up for the difference in the new price.
For example, if you raised the rent to $1,800 per month from $1,600, then you should collect $200 to cover the last month’s rent. If you based your security deposit on the rent, you should collect this difference as well.
This isn’t necessary, though, if you feel comfortable with the tenant. Asking for an updated deposit to match the rent is by no means mandatory.
5. Sign the Lease
Finally, it’s time to sign and officially renew your tenant’s lease in Fort Walton Beach. Once you’ve confirmed renewal, renegotiated terms, rewrote the lease, and collected deposits, it’s time for both you and your tenant to sign the new lease.
With these two signatures, you have officially retained your tenant and can enjoy a continuous stream of income from your rental property free from vacancy for another year.
Automatic Lease Renewal in Florida
According to Florida law, a lease automatically terminates on the set date in the agreement. However, provisions may be added to the lease that will automatically renew at the end of the stated term unless either the tenant or landlord gives notice of termination.
If the tenant does not wish to renew their lease in the case of automatic renewal, they must give at least 60 days’ notice before the term ends for one-year leases. For month-to-month leases, they must give 15 days’ notice.
The Key to More Lease Renewals
Unfortunately, not every tenant will renew their lease in Fort Walton Beach. However, there are ways to increase tenant retention and reduce your vacancies.
The key to more lease renewals is by working with a professional property management company. With unbeatable expertise and real estate knowledge, property managers provide a compliant and pleasant experience for your tenants, which encourages them to renew their leases.
All American Realty is Fort Walton Beach’s Go-To Property Management Company
Whether you’re looking for more lease renewals in Fort Walton Beach or are searching for someone to manage and maintain your home during PCS season, All American Realty and Investment Group is here to help.
We specialize in helping military members find practical and profitable solutions for their homes while they are stationed elsewhere. With our professional and service-oriented team, you can trust that your property is in good hands with us.
Want to learn more? Check out 10 Ways to Maximize Your Rental Property Profits in Fort Walton Beach next.