As Ludwig Erhard once said, compromise is a lot like dividing a cake. When you do it well, everyone will think they have the biggest piece.
This principle applies to lease negotiations as well. To keep both parties happy, you'll need to find a compromise on a variety of terms, such as:
- Monthly rent
- Security deposit amount
- Landlord and tenant duties
- Pet policies
Want to get as big a piece of cake as you can? Here are some tips to help you successfully negotiate lease terms in Orlando, FL!
Do Your Research
Thinking of adding a rental escalation clause to the lease? If so, research similar properties in your area to see what's fair. Also, consider the benefits of keeping a good tenant at a slightly lower rate versus getting a new tenant.
You should also determine your price-to-rent ratio. This is how much rent you need to charge to break even on your investment. Being aware of your minimum rent lets you know how much room you have to negotiate.
Communicate Clearly
When a lease is set to expire, talk to your tenants about potential changes in terms. This allows them to start thinking about negotiations early, which builds trust and makes them more likely to stick around.
If you agree to any amendments to the lease agreement, write them down. Oral contract modifications are valid in Florida, but it never hurts to have them in writing. That way, an attorney can review them.
Negotiate in Person
Tone and nuance don't always come across via text or email. If you want to make changes to the rental contract, schedule a meeting with your tenant to discuss them in person.
These meetings also make it easier to listen to your tenants with compassion. Have they been a quality tenant but are now struggling financially? It may be worth temporarily lowering their rent to help them out.
Don't Neglect Maintenance
Keeping up with maintenance is a big plus in tenant-landlord negotiations. Under Florida law, some of your key responsibilities include:
- Addressing structural damage promptly
- Ensuring all utilities are functioning properly
- Investing in pest control
If your tenant brings up maintenance issues, be ready to discuss them. For negotiations to work, you must remain professional at all times. Avoid accusations and try to work toward a solution.
Be Open to Change
Flexibility is an essential part of lease negotiations. When deciding on lease term adjustments, consider how your tenant's needs have changed. This is particularly important if good tenants seem in short supply.
If you and your tenant can't agree on something, consider mediation. This is the best way to resolve disputes to both parties' satisfaction. No matter how big the disagreement is, try to avoid going to court.
Handling Lease Negotiations
The bottom line: lease negotiations can get complicated. Knowing where to compromise is the key to making the most of your investment. To get the best deal possible, consider turning to a professional property manager.
At PMI Main Street Mgmt, we can help you draft or negotiate a lease in Orlando, FL! We also offer a leasing guarantee: if a tenant doesn't fulfill at least nine months of their lease term, we'll find you a new tenant for free!
Contact us here to learn more about our property management services!
