When a fixed-term tenancy agreement is approaching its end, landlords and property managers often face the challenge of either finding new tenants or encouraging current tenants to stay.
Finding new tenants can be both time-consuming and costly, making it essential to focus on retaining quality renters whenever possible. By understanding why tenants decide to move and taking steps to encourage tenancy agreement renewals, landlords can reduce vacancy periods and turnover costs. Here’s a closer look at the top reasons tenants move and what you can do to keep them in a fixed-term tenancy.
Top 5 reasons tenants move
1. Affordability issues
One of the most common reasons tenants move out is affordability. Changes in financial circumstances—like job loss, a reduction in income, or unexpected expenses such as medical bills—can make the rent unaffordable. Even if it’s not the landlord’s fault, tenants may need to find cheaper accommodation to manage their cash flow.
2. Job change or relocation
When tenants change jobs or relocate for work, they often need to move to be closer to their new workplace or to adjust their living situation based on their new income. Downsizing or upgrading based on a new job is also common, meaning tenants may look for a property better suited to their updated financial position.
3. Maintenance issues
If maintenance concerns are neglected, tenants can become frustrated and seek alternative accommodation. Whether it’s an unaddressed problem they’ve previously reported or constant issues cropping up, a poorly maintained property can lead tenants to look elsewhere. Ensuring prompt attention to maintenance issues is crucial for tenant satisfaction.
4. Renter's market opportunities
When the market is favourable to renters—meaning there are more available properties than demand—tenants may move to find a better deal. In a renter's market, they may be able to secure a larger property, a more convenient location, or better amenities for the same or even a lower price than they are currently paying.
5. Changing personal circumstances
Major life events such as marriage, divorce, or separation often lead to changes in housing needs. Tenants may require a property of a different size, or they may simply need a fresh start. Such changes are often unavoidable and can prompt tenants to move on.
Key ways to encourage tenancy agreement renewals for fixed-term tenancies
1. Incentivise tenancy agreement renewal
If you have tenants who look after the property, pay rent on time, and are respectful, keeping them should be a top priority. Consider offering incentives for renewing the fixed-term tenancy agreement, such as holding off on a rent increase. This can be particularly appealing if market rents have risen in the area. By maintaining competitive rent, you’re giving tenants fewer reasons to start searching elsewhere.
2. Build a trusting relationship
A good relationship can go a long way in retaining tenants. Aim to establish a friendly and trusting relationship by promptly responding to tenant enquiries, handling repairs efficiently, and being approachable. A regular property maintenance schedule, including routine checks like smoke alarm testing and inspecting for leaks, shows tenants that you’re proactive in ensuring the property remains in good condition.
Working closely with your property manager to ensure regular property inspections by tradespeople also builds trust, reinforcing the idea that tenant concerns are taken seriously and promptly addressed.
3. Make tenants proud of their home
Everyone wants to live in a well-maintained property. For houses, invest in landscaping and garden maintenance to enhance street appeal. This not only improves the property’s value but also makes tenants feel proud to live there. For apartment units, ensure that common areas and entryways are clean and welcoming. A well-presented property is one that tenants will be more likely to call home for the long term.
4. Be flexible with rent payments
Life happens, and sometimes tenants may need a bit of leeway with rent payments. Offering a grace period—such as allowing rent to be paid by the 5th of the month rather than strictly on the 1st—can show tenants that you are understanding and fair. However, it's important to communicate clear boundaries so that payments aren’t delayed for extended periods.
5. Address complaints promptly
Aim to resolve tenant complaints within a reasonable time frame, such as a week. Addressing issues promptly not only shows that you value their comfort and wellbeing but also sets the standard for how tenants expect to be treated. When it comes time for a tenancy agreement renewal, tenants will likely remember how responsive you were in addressing their concerns.
What happens when a fixed-term tenancy ends?
When a fixed-term tenancy ends, it can either be renewed for another fixed term, or if no new agreement is signed, it will automatically roll over into a periodic tenancy. In a periodic tenancy, the agreement continues on an ongoing basis until either the tenant or landlord provides the appropriate notice to end it.
Periodic tenancies offer more flexibility to both parties, as they don’t have a set end date. However, if you prefer to maintain the stability of a fixed-term tenancy, it's important to discuss renewal options with your tenants well in advance of the fixed-term expiry.
Talking to tenants about renewing their fixed-term tenancy agreement
Around 90 days before the fixed-term tenancy expires, it’s time to discuss renewal. If you’ve been attentive and supportive as a landlord, a tenancy renewal should be an easy conversation. Rather than focusing on convincing tenants to stay, the discussion should be an open conversation about their needs and yours. This transparency builds goodwill and helps create a positive outcome for both parties.
By understanding the reasons tenants move and taking proactive steps to meet their needs, you can significantly reduce turnover and keep quality tenants longer—whether through renewing their fixed-term tenancy or ensuring the conditions of a periodic tenancy suit everyone involved.
Share
