Negotiating Lease Renewals: Tips for Landlords

Negotiating lease renewals can be a tricky business. On one hand, you want to ensure tenants remain on-site, but on the other hand, you need to ensure they are paying market rent. As a landlord, it’s important to be aware of industry trends and rental prices so you can evaluate the current market when negotiating a lease renewal. Whether it’s for residential or commercial property, follows these top tips to help secure the best deal for your business.

Plan Ahead

Making sure you are properly prepared before negotiations is close to essential. Start by researching the local rental market and current industry trends. Be aware of potential problems that could arise, such as late payments or issues that haven’t been addressed properly. The more prepared you are, the better prepared you will be to negotiate.

Allow Adequate Time

Time is on your side in terms of a lease renewal and you should aim to start negotiations no later than a month and a half before the end of the current lease. This will give you time to consider terms of the new lease. If necessary, you should also allow extra time for the tenant to seek legal advice on any new terms.

Ensure You Are Remaining Complaint

In most cases, landlords must have a reasonable cause to not renew a lease or evict a tenant. Tenants can challenge your decision if they feel you have not acted fairly. Make sure both the current and the new lease are compliant with tenancy laws. Don’t be tempted to do something illegal in an attempt to save time and money during the process.

Be Open-Minded

It’s important to be open to input from both sides during the negotiations. Retaining valued tenants is a priority, so be ready to listen and hear their issues, requests, and concerns. Being flexible can be beneficial for both you and the tenant in the long run, so don’t miss the opportunities available to come to a mutually agreeable solution.

Let Them Know You are Available

It’s a good idea to let the tenants know at the earliest stages of a lease renewal that you are available to negotiate. There may be things that are important to them which you may not be aware of. If possible, let them know that you are willing to negotiate before they make a decision to stay or move on.

Be Proactive When Negotiating Rates

Be proactive when outlining rent rates before a new lease is being negotiated. Stay up to date with current market trends and understand where your rates should be set in order to make them attractive to tenants. Be prepared to offer incentives that will make the new lease more attractive.

Take a Professional Approach

When in negotiations it’s important to remain professional and ensure that both sides’ best interests are taken into account. Being organized is key, including using an appropriate tone and language throughout discussions. Set clear expectations right from the start and be ready to stick to them throughout the process.

Don’t Hesitate to Ask for What You Want

Don’t be scared to push for what you want, as long as it’s well aligned with the market rent. Make sure you do your research and keep a close eye on industry trends, to ensure that you can legitimize your demands.

Stick to Your Principles

When negotiating a new lease, it’s important to remember that you are the one who holds the power in this transaction. Be prepared to put your foot down and stick to your principles if you feel negotiations are going against what is best for you.

Advise the Tenant of Possible Changes

If you are planning to make changes to the lease before renewal, make sure to let the tenant know ahead of time. While it’s important to stick to what you feel is in the best interest of the tenant and landlord, also know when certain changes might be too radical for a tenant to agree to.

Offer a Compromise if Needed

It’s important to accept that some compromises may need to be made on either side in order to reach an agreement. Instead of rejecting a tenant’s proposal, think of ways in which you can come to a mutual solution that satisfies both parties.

Be Ready to Move On If Needed

Finally, it’s important to remember that you should always be ready to move on if negotiations are not going your way. Some tenants may decide to move on anyway, while others may receive a better offer. If you feel that negotiations are not going well, it’s always best to cut your losses and seek a better tenant who is more willing to pay what you are asking.


Negotiating lease renewals can be a challenging process but having an organized approach can help make it smoother. It is important for landlords to be aware of current industry Trends and stick to their principles during negotiations, and also be open to compromises if needed. Furthermore, landlords should always be ready to move on if negotiations are not going their way.

What strategies should landlords use when negotiating rent increases during a lease renewal?

1. Explain Your Reasons for the Increase: Landlords should provide enough explanation of why they are proposing the rent increase to demonstrate that it’s fair. For instance, if remodeling or repairs were recently done to the home, if taxes have gone up, or if you’re having difficulty finding comparable rentals in the area, now is the time to mention it.

2. Offer Astute Incentives: A rent increase is an added financial burden for the tenant, so landlords should offer incentives to soften the blow. This can include rent discounts for paying on time, giving them the option to pay extra months upfront or offering to cover utility payments.

3. Consider Alternatives: If the tenant isn’t happy with the increase, landlords can present alternatives such as offering to stretch the rent out over a longer-term lease or even a month-to-month agreement.

4. Explain the Short-Term Benefits: When negotiating, landlords should emphasize the short-term benefits of accepting the rent increase. This could include access to the same amenities, avoiding having to move out and of course, the promise of quiet enjoyment.

5. Agree on Terms Upfront: Finally, before any agreement is made, it is important for both parties to agree on terms upfront to prevent any misunderstanding. These can include conditions of breakage of the lease, penalties for late payments, and rules for maintenance or repair requests.

What other expenses should landlords consider when negotiating rent increases?

1. Property taxes: Landlords should be aware of the property tax increases in their areas, and should pass on any additional costs to tenants in a rent increase.

2. Maintenance and repair costs: Landlords may incur additional costs to maintain and repair their rentals, which can be passed on in the form of a rent increase.

3. Utilities: Utilities, such as water, gas, and electric, can increase in cost drastically over time, and suggests that landlords factor these into their rent increases.

4. Insurance: Landlords should keep insurance updated and factor the premiums into the rent increase.

5. Regulatory fees: Most cities and states require landlords to pay fees on an annual basis. These costs can be passed on to tenants through a rent increase.

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