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My Lease Renewal Strategy

July 13, 2013

My tenants in Property 2 reached out to me regarding their upcoming lease renewal. To be honest, I typically don’t actively renew leases when the initial move-in lease expires. I just allow them to continue to pay the same amount on a month to month basis. The lease language explains the rate should go up for a “month to month” lease period, but I never enforce this and just continue to accept the initial rent rate. This could allow me to ask them to move with minimal notice if something goes awry.

renew lease

However when tenants are asking me about renewing their lease, I jump at the chance. My younger tenants tend to stick to their lease term as many have moved from a tightly managed apartment complex and still think the lease is worth more than the paper it is written on. In reality for me putting a judgement against them for not living out the term of their lease is not going to be worth it.

My tenants lease was due next month, so I told them we can discuss it when I pick up rent. I like to meet my tenants face to face and really understand what they want to do. They said they wanted to renew, but asked if they could sign a 6 months vs a 12 month lease. This is normally not a problem. However a six month lease would be expiring in February. This is not a good time of year for a vacancy. I explained this to them and told them I could do an 8 month lease that would expire on April 30. I told them they don’t want to move in February and I don’t want a vacancy then either.  They agreed and signed an extension through April of next year.

For this renewal, I just overwrote the new expiration date and term on the first page of the initial lease. I had them initial near the overwrite and re-sign the signature page of the lease with a brief statement about the new term. I made copies and mailed it to the house.


From → Landlord

One Comment
  1. I use a similar technique when I have tenants on a long term lease and the lease runs out. I allow them to switch to a month to month and allow them to stay as long as they desire.

    I prefer to have all tenants on a month to month to start with, in case they turn out not to be good tenants and I want to remove them. But, I still have a few older tenants on long term lease.

    I’m with you on the legal issues. I’m not going to take them to court for leaving early. I’d probably only do that in a situation where they did some excessive damage to the property.

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