Imagine real estate investment as a running race. On the first lap, you secure a deal on a property, and in the second, you tackle the job of marketing it.
A third lap sees you secure a tenant, and now you're rounding the final bend. But there's one more hurdle to clear before you reach the finish line: negotiating the lease terms.
Lease negotiations for your Chester County rental don't have to be daunting. With the right strategy, you can navigate these tenant negotiations swiftly and successfully. Here are some tips to help guide you.
Research the Local Market
Successful negotiations happen when you know your strengths and weaknesses. Before beginning any discussion on a lease, check what's happening in the local market.
That starts with researching rental prices and vacancy rates in neighborhoods like West Chester, Downingtown, and Malvern. Check the 12-month trends and use this to ensure the offer in your lease is competitive.
Hire a Professional
Lease reviews can become complex when negotiating the small print and staying compliant with the law. So don't go it alone.
A real estate professional will have the relevant experience and legal contacts to ensure your final lease is robust. They can suggest amendments that benefit you and protect your real estate investment. Plus, they'll be able to guide you on negotiation tactics.
You Can Negotiate More than the Rent
When negotiating, your first instinct might be to focus on the final rent price. It's the most common part of any lease negotiation. However, it's not the only thing to negotiate.
You'll finish with a better agreement if you negotiate other terms. For example, you could discuss different lease lengths, offering a rent discount in exchange for a longer lease. Or negotiate details like termination clauses or fees.
Negotiating Upgrades
One thing you should always negotiate in any lease is the upgrades a tenant can make to the property. The more details and rules you can add, the better. It will avoid confusion or miscommunication.
You can also provide an allowance to tenants for improvements, and it's wise to negotiate this allowance when drawing up the lease terms.
Think Long Term
One mistake people make in a lease negotiation is focusing on the immediate future and signing that agreement. However, the most successful leases are ones that are future-proof.
So consider different scenarios that you want covered in your lease to protect your investment so that if things change, your lease terms don't become a worry for you.
Differentiate Your Property
When marketing a property, it's easy to brainstorm ways to make yours stand out from other listings. But have you thought about doing the same with your lease?
An attractive and unique lease could help it appeal to the right tenant. Making it flexible is one of the easiest ways to secure the best tenants. Flexibility makes people feel more comfortable about signing.
Mastering Lease Negotiations
A great property deal might be your first priority in real estate investments, but lease negotiations should be your second. A sound lease agreement can help maximize your profit.
Key PA Property Management's friendly, professional, and efficient team can give you the support you need for your growing real estate business. Discover more about our services in Chester County, PA, here.
