By: Marcelo Steinmander
Renewals may rarely be in the spotlight regarding any of our real estate discussions. While writing this post, I actually realized that I am now in my twelfth year in real estate, and this is my first time discussing renewals as a business offering. No better time than the present to say a few words! First, let’s start with some general info:
Many real estate offices help investment property owners manage their portfolio of rental properties. That looks like helping owners find tenants, executing leases, taking rent payments, finding lawn and maintenance professionals to help tend to properties and managing renewals.
Renewals are new agreements between a landlord and an existing tenant. It requires creating and executing new lease before the old one expires. These new leases might involve updating previously agreed-upon pricing and terms or require new terms altogether. Securing a renewal for your client is a great way to ensure there’s no interruption in cash flow from their investment property, which also helps secure your future as their representation in real estate.
In reality, renewals are actually a notable part of our real estate business at Berkshire Hathaway Home Services EWM Realty. We have done renewals for over a decade, and for some of our customers, especially landlords, it is the service that matters most to them.
The main benefits to our clients are:
- Peace of mind. Our clients know they have an established tenant staying in their property.
- Cost reduction. A vacant property means the landlord assumes responsibility for the property, which costs money. Renewals help them avoid the costs—utilities and otherwise—associated with not having the unit occupied.
- Seamless management. When we’re brought in to help manage a property, we keep track of all the details, including when to renew a lease. Keeping track of renewals and expirations ensures seamless management for our clients.
Providing this service and doing it well means that many of the landlords we work with:
- Continue buying more investment properties and/or use our services again to buy and lease the units
- Refer us to other potential customers
- Use us to lease the unit if a renewal isn’t a possibility
Renewals provide a unique opportunity to work with clients consistently and show them that working with a real estate professional can provide peace of mind in a long-term partnership. Certain things must be done to ensure the renewal process is seamless.
In most cases, I usually start having conversations with the landlord and the tenant when the lease is about 60 days away from expiration. Keeping stress levels at a minimum for all parties is a priority, so we keep the dialogue as casual as possible while still maintaining professionalism. Our main goal, ultimately, is to preserve the existing relationship between both parties and to do this, we have to be reasonable, professional and amiable liaisons.
If the tenant and landlord both intend to renew and renegotiation isn’t needed, the process is relatively easy and quick. It’s typically just a matter of drafting new paperwork and collecting signatures. In other cases, reaching a deal between the two parties can take a while. Just as it is when selling real estate, renewals are unique and no two deals are the same.
Some renewals require renegotiating terms such as the price, lease termination fees or the length of the lease. If the landlord and tenant have differing opinions on terms, patience from you as the professional and liaison is required.
Sometimes, a renewal isn’t possible, no matter what kind of magic we try. It’s important to remember that the client’s best interest is important. It all depends on the circumstances and the needs of the parties involved.
Plenty of circumstances outside an agent’s control—like a tenant moving out of the area or needing a different kind of living arrangement—might make a renewal impossible. At that point, I do what I can to quickly shift gears and list the unit to get it rented as soon as possible. When you’ve exhausted your options and made it a priority to put the needs of your client first, customers usually understand.
In any case, renewals can be a great addition to your real estate business. The best way to get started in renewals is to work with investors and be willing to incorporate leasing as part of your services. Over time, an agent that works with investors will have a steady roster of properties that need to be leased or renewed monthly, creating consistent work and income.
Marcelo Steinmander is a real estate professional in Miami, Fla. He embarked on his career as a realtor at the young age of 18. His diverse background and fluency in English and Spanish made this an ideal field to build and retain long-lasting relationships. In 2020, Marcelo was recognized as a Top 20 Under 40 by the Miami and Chicago Mainstreet Organization of Realtors. He was also a Top 100 Agent in the Southern United States by NAHREP. By the end of 2021, Marcelo became the #1 individual producer in Berkshire Hathaway HomeServices EWM Realty based on the total number of homes sold, and in 2022 an honoree for the National Association of REALTORS® 30 Under 30. Find him on social on Instagram, X (formerly known as Twitter) and Linkedin.