As a Boston property owner, you’re probably well aware of the typical rental cycle in the city. Roughly 65% of tenants are on a September 1st cycle and the rest are on a handful of different dates — June 1st being one of the most common. When those dates start to approach, you’ll probably find yourself asking some questions, like…
- When should my tenants renew their leases?
- How much time should I give my tenants to sign?
- Should I be raising the rent? By how much?
- What is the property value?
With a combined 15 years in real estate and property management, we’ve answered these questions for many property owners in the Greater Boston Area.
In our experience with rentals, renewals, and management, the best time frame in the Boston market to send rent renewals is between 120 to 180 days in advance of lease expiration. At first, that number can sound crazy — 120 to 180 days? That’s just about the same amount of time it takes my tenants to move in and get settled!
But hear us out.
We facilitate over one hundred rentals a year, and what we’ve learned with our rental clients is that they are well aware of the competitive rental process in Boston. To combat that — and still land a stellar apartment — they are reaching out to real estate firms almost 4 to 5 months before move-in. And depending on the neighborhood, it could be upwards of 9 months in advance.
In short, if you wait too long to send out your renewal notices and one of your tenants chooses to move out, you’ve put yourself at risk of finding a good candidate for optimal market rent. So put yourself at ease and follow the “golden rent renewal rule” of 120-180 days.
If you’re already in that “danger zone,” get your renewals out as quickly as possible! If someone doesn’t choose to renew, call a broker to get it on the market right away.
At MerGo, we’re always happy to have a conversation and help you — especially with our resources as real estate professionals on the Walker Residential Team at Berkshire Hathaway.
Next steps: reply timelines, rent increase, non-renewals
After sending renewals, give the tenants 10-14 days to reply. Again, you might be thinking, “Is that enough time?” Yes, it is. Most people know if they will stay or go. If you give your tenants a renewal without a timeframe for replying, you risk ending up in a situation where it becomes extremely difficult to re-rent the unit.
As for how much you should increase the rent, we usually recommend around 3-5% of the current rent amount. Ideally, this number would be found by factoring in many different aspects from a comparative market analysis, which can be performed by an experienced real estate professional.
Some other questions to consider with rent increases could be…
- Does the unit require repairs or upgrades? Unless those are completed, you most likely shouldn’t increase your rent
- Similarly, what is the status of the overall building?
- How much did taxes, water, gas (if applicable), and sewer increase? Are there any other services that increased in price?
These are just a few circumstances that you should be taking into consideration when you are deciding rental prices.
In the rare and unfortunate case that you have a tenant that chooses not to renew a lease with, it’s important to speak with an attorney who specializes in landlord-tenant law. Regardless of whether or not you raise the rent, send a rent renewal, or send a non-renewal notice, prepare to hear from the tenant and be able to explain any changes made.
Set yourself up for success
In sum, you want to be a fruitful and prosperous property owner and landlord. While that may seem easy on the surface, it’s also important to be aware of the unpredictability and risk you experience as a landlord. So, we urge you to err on the side of caution and take action on these issues as soon as possible. That way, you can set yourself up for success right now, as well as preparing yourself for all of your future property ownership endeavors.