I have 2 non renewal tenants who are entering their final month of tenancy. One because of poor housekeeping, the other because of hysteria and instability.

Non renewal in both cases is a reactive response on my part. Not planned.

I would be better off to non renew at the 3 year mark. I would reduce the scope of the reconditioning job. Additionally, I would be able to raise rents to market rates and not lag further behind.

Labor shortages have held me back from implementing a strategic non renewal plan. But, strategic non renewal seems likely to reduce my overall labor needs long term.The smaller scope projects of paint , bathroom kitchen improvements are quick. The whole house refurb jobs drag on. Delays due to scheduling, materials are always a problem.

The whole house refurb jobs always stem from a long term tenant; I see the problem, decide that I may as well delay refurbishing until the current tenants move out….they stay for years, then I am faced with a big job.

I have clearly renewed too often, I think I will err on the side of non renewal when in doubt.

Who here plans non renewal? Tell me about it.

I've said here before that my favorite tenancies last about 3-4 years. If they leave sooner rather than later, I can legally use their deposit to fix damages, which if left too long become normal wear and tear. Let's say the same tenant stays for 15 years... well, that flooring they damaged 12 years ago has now depreciated and it's "normal wear and tear" and I get no help replacing that.

There is a method to this madness. Scuffed up 3-4 year old paint is damage. Scuffed up 15 year old paint is normal wear and tear. I can charge for the former. I cannot charge for the latter.

Getting my drift?

I know that a lot of people will non-renew so they can update the place. I have not done that. I always thought that the tenant was in his/her home and that it wasn't right for me to boot them without just cause. Not many good places in my area and good prospects are slowing down.

That being said I have a 20 year tenant whose place will be a full rehab when he leaves next year. I have not done anything in the place since I rehabbed it and he moved from one apartment into this one. Maybe 14 years ago?

In that time frame I have made a lot of changes in how I set my places up. LVP instead of 1x1 self stick tile in the kitchen and bathroom. Pull carpet in the upstairs hall and laundry to be replaced with LVP. Place LVP or similar on the risers of the staircase. Tile above the shower, kitchen backsplash and around the stove. Semi-gloss white in the closets and all the trim. Updating the fans, fixtures and paint colors. Plus more I can't recall right now.

I also did not buy decent quality carpet back then, and it shows in a year or so of use. Even for a single guy that spends weekends at the lakes.

With the time frame that he has been there I would have had to do a lot of this possibly multiple times anyhow.

This tenant is not at my market rents but that is an issue I have resolved with all my incoming tenants. I did not give this guy an increase for many years. I have learned from that for sure.

I usually leave my tenants in place since my hubby is retired. Otherwise, he invents things to do, like raking leaves, which is the tenant's responsibility, and from then on, they wait for him to do it.

Except for the mold fiasco tenant who took me up on the happy clause, our tenants are ok.

My experience is that the first year tenants are really careful, mindful of their deposit, which is quite large. The second year, they start to relax a little bit with the care but they still think about their deposit. They make themselves more and more at home, loosen up every year and by year 4 or 5 they take over ownership (in their own mind) and can spread out and live as they like and they forget that damage is going to come out of their deposit.

If you have screened carefully, at the end of year one the house will be spotless and undamaged. At the end of year two, they can still clean it up to pass move-out clean. After that, they start to live in it like they own it and there will be some damage.

Sisco, I believe you are doing the right thing. It is wise to pick when you implement strategic planning.

I agree with Sid. 4 or 5 years on my smaller units is usually the sweet spot for turnover from my perspective.

I will have two vacancies in the fall of 2025 - both are buying homes and both have been with me about 4 years. Both units will get some upgrades and and some good cleaning. At turnover, the rent will come up to market. I'm about 8% below market at this time.

That is how I see it MAT.

In three years trends might change but in fifteen years they definitely have changed.

MAT, your numbers may be right, but I believe you are leaving out one big part of the equation. If you changed residents 3 or 4 times during that 15 year period, you should also be increasing your rents significantly at the same time to higher market rates to coincide with the rehab/refresh.

I dare say, most landlords are not raising rents on a regular basis on long term residents (especially if they are not making any improvements) that would compare to the increases you can get with the newer rents for new residents every 4 to 5 years.

Notice, I said "many" landlords are losing out... However, I am a firm believer that one should be raising rents every year to keep up with top market rents. I prefer not to non-renew without a specific cause. I agree that this is the resident's home, and I too would not boot them out without any cause.

I started raising rents a little bit every year.

Property taxes usually go up every year. Insurance definitely goes up every year. Labor rates and materials go up annually as well.