How many days before lease expires , you contact your Alberta tenants for renewals

TAMI

Inspired Forum Member
Registered
I have several lease that are coming up in Edmonton , in the past i used to contact the tenants a month and half before or even two months for renewal . Currently, I have a bit of concern that with so much notice in advance , the tenants have too much time to make a decision and may choose another property for incentives . I wonder what my fellow members suggestion , how many in days in advance will you advise your tenants that the leases are coming up for renewals and offering them to write a new lease .
 

kfort

Senior Forum Member
Registered
Sounds like the real problem may be there are "better" places on the market for similar or nicer price?
 

bradyloewen

Inspired Forum Member
Registered
In Saskatchewan you need to give a two month notice of intention for fixed term leases (two months prior to lease expiry), then the tenant has one month to accept your intention. We have two places that the year lease is up end of May. One of the suites let us know they'd be renewing for the 3rd year at the same rent (prior to us sending out the form!) and the other tenants are thinking about if they want to take another year lease which we offered. While they are thinking about it we are advertising that suite as it may take two months to fill it.
Give them your intention and advertise while they think about it.
 

TAMI

Inspired Forum Member
Registered
Thank you Brady, your answer to advertise it while they think about it can be a winner ! Kris and Thomas , my concern is because prices are changing and turnover of tenants for $200 lower is very reasonable in today market . Additional to the concern to lose the tenants , I have a constant debate of how much discount to give to tenants that sign leases prior to 2016 . Im planing to lower the rent and set it to be attractive for 2016 rental prices . Even though , i wonder Thomas and Brady how long before the lease is expired you will approach your tenants for signing a new lease for a year
 

kfort

Senior Forum Member
Registered
how long before the lease is expired you will approach your tenants and find out what will keep them for another 12 months.

Long enough that if they say no, you'll fill it. Whatever that is in your market, with your current skill set, that's your answer.
 

bradyloewen

Inspired Forum Member
Registered
We did it the day it was required with the two month intention. They had a good session on this topic at the REIN SOS weekend last month. Call the tenants or visit them don't text and don't beat around the bush - everyone knows the rental market/prices have changed. Get comps for what your places would be renting for if vacant now. If the unit needs some updating or renos might be a good time to do them - for example if flooring can be done while tenants are away for the weekend let them know you want to do that for them.
Lots of ways to do incentives, but never know if you are doing/giving too much.
 

bradyloewen

Inspired Forum Member
Registered
And don't forget fixed term leases don't need to be a year. Maybe it's a 3 month lease that comes due before university students start looking again. Keeps you in control a lot more than month to month lease.
 

Matt Crowley

Senior Forum Member
REIN Member
60 - 90 days. (I'm based in Edmonton) With good tenants, I don't worry about them looking. I know they will look because they are smart and informed. I ask them what they would like and tell them we are looking a new market today.

Incentives are fine but if you are just robbing Peter to pay Paul there is really no point. Investing in $1200 new paint for a home that won't look new when the tenants move out in a year or giving them gift cards or gift baskets is just a paper transfer. Putting in tangible long-term upgrades like new flooring or windows that have to be replaced in a 12-20 month span might have value.

The reality is that you are going to have lower rent this year. I'm not sure how many turnarounds you have done this year but I have done a bunch. 4x the marketing spend and 5 - 10x as many viewings. Much harder and more expensive to fill this year. Keeping tenants for a year (especially if you don't have to invest thousands in paper-transfer incentives) is a smart move to keep cash reserves for this next bumpy patch.
 

Sherilynn

Real Estate Maven
REIN Member
Lower rents for Edmonton renewals are not always the reality. We have had several tenants renew at the same premium rate they were paying. They liked the places and how they are treated, and they have no desire to move, so they didn't shop around and they didn't ask for a rental reduction. In one case, we increased the utility portion of their monthly payment.

We ask a couple of months in advance if they are planning to renew. Like Brady does, we advertise the property if they are unsure. Once we have prospects wanting to see the property, we contact the tenant and ask if they have decided to renew or if we should show the property. Sometimes they don't decide until the prospect applies for the property, at which point we must have a decision.
 

RedlineBrett

Senior Forum Member
REIN Member
Why is that? Bill 202?

That's part of it... yes, but the bigger reason is it gives the investor control over the lease rather than the tenant. Tenants are getting antsy and flaky and are shopping around. Do your deal once per year when you are in control of the time frame.
 

Matt Crowley

Senior Forum Member
REIN Member
^ What I like about fixed term is no notice upon lease end for either party to end the lease. I use them in some cases where I want to ensure my turnovers happen May - September and I have a turnover during winter months.

I have to say I don't think periodic vs. fixed term makes a whole lot of difference.

The tenant is in the driver's seat either way (in my books). I think landlords are kidding themselves to think that they control things. Tenant is in the property up to 24 hours per day. Lots of tenants have $0 net assets. They have nothing financially to lose. (I know this is not what you are suggesting, but...) If you treat tenants like suckers, it is pretty easy to make the landlord pay.

Some investors use a 3 month fixed lease term to "test" a tenant. This is the sort of behavior that gives landlords a bad name.
 

Developer

New Forum Member
Registered
In Calgary we use to give 90 days but have cut that in half recently because we found that 90 days gave the tenant too much time to shop around.
 

SokalskiT

New Forum Member
Registered
I contact my tenants 90 days in advance with an offer to renew another year. If they tell me they are thinking of leaving I ask why. I have had to adjust my rents in a couple of cases down as that is the new market to keep good tenants. The other 3 have signed another year at the same rate. Have those conversations with your tenants, be realistic and know market rent. Be proactive not reactive and create win win.
 
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