Landlords and rental property owners know that renewing a lease with a good tenant is one of the best ways to keep your rental income consistent. The tenant pays rent on time and is familiar with rental property rules, and you avoid turnover and vacancy costs. With so much on the line, it is essential to know how to negotiate a lease agreement renewal the right way.

If you want to keep a qualified tenant, our Henderson and Las Vegas property management experts share tips for negotiating a lease agreement renewal that benefits both you and your tenant.

Review the Current Lease Agreement

The first thing to do is review the terms of the current lease agreement. What parts of the lease worked, and what parts did not? Are there any outdated rules that can be removed? Is there anything missing that you wished you had addressed upfront? Take the time to make a list of changes you can incorporate into the new lease agreement.

Assess and Anticipate Your Tenant’s Needs

Next, consider the needs of your tenant before making changes to the lease agreement. If your tenant had questions, suggestions, or feedback while renting from you, examine how you can use them to improve the living experience for the tenant.

For example, maybe your tenant asked about rent deadlines and if there was a grace period to make payments. Your tenant may need more flexibility because their paycheck schedule does not always align with the first of the month. Knowing this and that your tenant consistently pays their rent, you may want to adjust the lease to allow your tenant a more extended grace period.

Anticipating your tenant’s needs and making mutually beneficial lease adjustments gives you an advantage over competitors who may not offer the same leniencies.

RELATED: 8 Landlord Tips for Collecting Rent on Time

Understand Your Market Value

Negotiating a lease agreement renewal often involves a rent increase. This part must be handled carefully to ensure you have knowledge of the market to ask for fair value. Do diligent research to understand your local market and price your rental property by:

• Determining demand and vacancy rates in your area
• Looking at competitor rent prices
• Calculating your rental property expenses
• Knowing what amenities add value to your property
• Considering your tenant’s ability to afford an increase

If your rent is low for your area and you offer convenient amenities that add value, you have some leverage to ask for more. However, be mindful of rent control laws in your area to ensure you stay within the limits.

While Las Vegas does not currently have rent control regulations, you do not want to price yourself out of the market and lose your ideal tenant by asking for too much.  Be reasonable with your rates while staying competitive.

RELATED: When Should Landlords Increase Rent?

Approach Your Tenant Early

Another way to entice your current tenant to renew their lease is to approach them early with your offer. Tenants who are given the opportunity to sign another lease may prefer to stay where they are versus the time and effort it would take to find another place to live.

Reach out to your tenant about 90 days before the current lease expires. This gives them enough time to consider the offer, negotiate compromises, or prepare for rent increases. Additionally, if they decide to move out, this gives you more time to advertise and fill the rental property vacancy.

Offer Incentives to Renew

Qualified tenants can be challenging to find in a very competitive market. If you want to retain a good tenant, you can offer incentives that make them more likely to renew their lease. Examples of renewal incentives include:

• Giving discounts on rent or cash-back for on-time payments
• Offering an extended lease agreement at a set rate
• Agreeing to reasonable property upgrades, such as new appliances
• Covering some utilities, including high-speed internet

If it is convenient and cost-effective for your tenant to stay, they will likely decide to renew their lease. These incentives are a good way of giving landlords a little more leverage during lease agreement renewal negotiations.

Stay Open to Comprise

Remember that a lease agreement renewal negotiation is a back-and-forth process. When trying to get your tenant to renew the lease, it is important to listen to their side and be considerate of their needs. You can avoid the stress and financial loss of a rental vacancy simply by conceding to a few reasonable requests.

Open the conversation by letting your tenant know you are open to negotiations. If they are unhappy with the new lease terms and think you are unwilling to compromise, you risk losing a steady tenant. Give them an easy way to reach you and be responsive when discussing the lease.

RELATED: 10 Landlord Tips to Build Strong Relationships with Tenants

Remain Professional

During lease negotiations, it is vital that you remain calm and professional. It is possible that a tenant may become upset or confrontational if rent rates are going up or they do not agree with other lease terms. To prevent the conversation from turning into an argument, respond appropriately without letting your emotions get away with you.

Again, inform the tenant that you are willing to find a compromise that works for everyone within reason. Explain your side and why you are making changes to the lease agreement. Then, allow a response while staying neutral. Clear and open communication can help diffuse the situation and avoid misunderstandings that lead to the tenant leaving.

Work With a Professional Las Vegas Property Manager

Las Vegas landlords have a lot on their plates. Between maintenance requests, collecting rents, and negotiating lease agreement renewals, it can be challenging to keep up with everything. Sometimes, responsibilities slip between the cracks and leave landlords with expensive bills and prolonged rental vacancies.

Our Black & Cherry property management team has helped Las Vegas and Henderson landlords manage their rental properties and maximize the return on their investments for decades. We offer comprehensive services, including handling lease agreements, to streamline your business and free up your time.

Contact our property management team to learn more about our property management services and how we can help you grow your rental income!