It is amazing how many landlords will neglect their current tenants when looking to fill a vacancy. This may be because the communication between the landlord and the tenant is less than perfect. Other times, this is simply an oversight. Any seasoned landlord will tell you that there is no such thing as a perfect tenant. Some will call you multiple times a week to complain about this or that, while others will consistently be a few days late with the rent. Compared to having a vacancy or dealing with an eviction, these problems are very small. If you have a tenant that you are comfortable with, you should reach out to them and at least gauge their interest in staying in the house before you look anywhere else. In other words, retaining your tenants should be a priority, not an afterthought.
Most tenants would rather stay in their current living situation than move every nine months to a year. Having a good tenant stay would be the best case scenario for the both of you. You get to avoid the time consuming process of marketing your property for rent, screening potential tenants and settling on one you are comfortable with. You are also rolling the dice that your new tenant will be as good as the previous one. There is no guarantee that your new tenant will not create much bigger problems than calling you to change a light bulb.
Your tenants are most likely just settling into the place after the first year and, unless they are forced to move, would prefer to stay. Like most everything else, price is typically the biggest factor in making a decision. If the price is right and they feel comfortable with you, they probably don’t want to leave. If they are struggling to make the payment and need to look at something a little less expensive, they may consider a move. There is no harm in asking your tenant and finding out what they are thinking.
If price is a factor, you can offer a small discount or some other concession to get them to stay. From a financial point of view, if you discount the rent $50-100 a month, it will impact your monthly cash flow, but not necessarily your bottom line. If they decide to stay at the reduced price, you do not have to spend the time or expense in finding new tenants. Also, you can barter with your tenant to cut the grass once a month or shovel snow if you reduce the rent. Either way, you should view a good tenant in high regard. If you have ever gone through an eviction or had a really bad tenant, you would gladly concede $100 a month for the security a good tenant provides.
If you do not want to lower the rent, you can also think about including the utilities in the rent, preferred parking or some other small perk to get them to stay. You can opt to hold your ground and wait for them to make a decision. If they decide to leave and you end up with a bad tenant, you may end up kicking yourself that you didn’t do more to convince your tenant to stay.
