Out of 122.8 million households, 36% were renters in 2019. That number is estimated to increase to 43% in the next five years.

However, for some, leasing month to month can cause both the landlord and the tenant undue stress. The landlord is worried the tenant will terminate the lease, and the tenant is concerned that the landlord will want to find new tenants.

This is where lease renewals can come in handy. But how and when do you draft one? If you're a landlord concerned with your renewal system, keep reading as we explain the benefits of lease renewals.

Why Offer a Lease Renewal?

Any landlord can agree that an exemplary tenant is worth their weight in gold. Someone who keeps a tidy home doesn't damage the property, and pays rent on time is a much safer option than returning to screening new tenants who may not be as respectful once they're in.

What to Include in a Lease Renewal Agreement?

So you've decided to keep your tenant and offer them a lease renewal. But what should you have in it? There are two ways to go about renewing a lease. You can:

• Include an "option to renew lease" clause in your existing leases
• Offer an updated lease to be signed

If you choose to include an "option to renew lease" clause on your existing leases, you run the risk of having to keep on less-than-ideal tenants longer than you'd like. It's for this reason that this option is not always recommended.

If you are offering your tenant an updated lease, you'll want to have the following information detailed in the lease renewal form:

• Details of tenant
• Address of the property
• The current lease expiry date
• The new rental amount
• Lease length options (e.g., one year, six months, month-to-month)
• Your contact details (landlord or property owner)
• The date the tenant needs to have made a decision

The tenant either needs to sign and return the document or counter with a notice of lease non-renewal.

Sending Lease Renewals: How & When

Ideally, you will have asked your tenant how they would like to receive their renewal letter but consult your state's landlord/tenant laws before finalizing anything.

You'll want to send the lease renewal letter at least 90 days in advance. This gives the tenant 30 days to consider their response, assuming your lease requires a 60-day notice of lease non-renewal.

Should you not wish to renew your tenant's lease, provide your tenant with proper written notice. Like with the lease renewal letter, you want to send your lease termination letter at least 60 days before the lease expiration date.

Take the Hassle Out of Property Management

Keeping up to date with your state's lease renewal regulations means that you can offer your tenants smooth and hassle-free lease renewals, which means you have a better chance of your exemplary tenants signing on for another term.

Managing a rental agency is often a full-time job, so let us take care of all the hassle. Contact us today for all marketing, leasing, property management, and eviction assistance if you're in Austin, TX.