According to an April 2024 article from Denverite.com, over 24,000 apartments in the Denver area were vacant during the first quarter of 2024.
One of the last things you want for your Denver rentals is to become part of the group above. However, they can be if you're not implementing effective strategies for tenant retention and lease renewals.
Luckily, you've come to the right page. Our expert team at Walters and Company Property Management has compiled this guide sharing rental agreement renewal and lease extension advice. Read on, as what you learn here can help you keep your best tenants and lower your vacancy rates.
1. Send Early Reminders About the Lease Renewal Process
As reported by CPR.org, landlords in Colorado are legally required to offer lease renewals. It's a good idea to send reminders about them at least 90 days before the tenancy agreement expires. Early reminders give renters time to consider the offer.
Ideally, your tenants should inform you whether they want to stay or leave 60 days before their tenancy ends. So, ask them to tell you their decision on this specific date. Their prompt response gives you enough time to take the necessary steps if they choose not to renew, such as marketing your property early online to shorten the time it sits vacant after your current tenant leaves.
2. Offer Tenant Lease Extension Discounts
Incentivizing tenants with rental fee discounts can help make lease renewals more enticing. For instance, you can offer a small discount for the first six months of a 12-month lease. Another option is a 50% discount on the first month of a year-long lease.
3. Re-Think Your No-Pet Policy
If you currently implement a no-pet rule in your Denver rental, you may miss out on lease renewal opportunities. Your existing tenants may want a pet; if so, they will likely look for another housing provider with pet-friendly policies. According to Yahoo, a Zillow study found that renters now care more about pet-friendly rentals than amenities like washing machines.
4. Consider a Temporary Security Deposit Reduction
Under Colorado Revised Statutes § 38-12-102.5, landlords can require tenants to put down a security deposit of a maximum of two months of rent. So, if you charge $1,250 monthly, the most you can charge your Denver tenants is $2,500 for security deposit alone.
Two and a half grand is a lot of money, which doesn't even include advanced rental payments. Together, they can be quite taxing to your renters' finances, making rental payment collection challenges more likely.
So, why not reduce your security deposit requirements when asking tenants to renew their leases? Doing so can encourage them to agree to the renewal because they know they'll likely pay more if they move to a new rental.
Keep Those Lease Renewals Coming
Successful lease renewals are crucial to minimizing vacancy rates, making them essential to your rental business and income. So, consider following the strategies shared in this guide as early as today.
If you don't have time to develop a masterful tenancy retention and lease renewal plan, Walters and Company Property Management certainly does. With our many years of combined experience in real estate investing, property management, accounting, and financing, we can help you find and keep highly qualified tenants in the long term.
Speak with us today to get your free property consultation!
