Karen Behfar
As fall settles in and we head toward the final months of the year, many Brooklyn landlords are looking ahead to leases that may be coming up for renewal.
And with a lease expiration approaching, there’s one question that naturally comes up: Should I renew with my current tenant, or put the apartment back on the market?
It can be tempting to make that decision based on rent alone. If similar apartments appear to be asking more, re-listing may seem like the obvious choice. But the highest possible rent doesn’t always equal the best financial decision.
Renewal Strategy
A good renewal strategy looks holistically at the full picture.
One of the biggest mistakes landlords can make is waiting until the last minute to think about a renewal.
Starting early gives you time to speak with your tenant, understand their plans, and evaluate your own options without unnecessary pressure. If your tenant plans to leave, you’ll have more time to prepare the apartment and develop a strategy for bringing it back to market.
If they would like to stay, you can begin considering whether renewing makes sense for both sides. Good decisions are much easier to make when you are not under pressure and the clock isn’t making them for you.
Before focusing on what another tenant might pay, think about the experience you’ve had with the tenant(s) already living in the apartment. Do they pay their rent on time? Do they take good care of the property? Have they communicated well throughout the tenancy?
A reliable tenant has real value.
Of course, that doesn’t mean every tenancy should automatically be renewed. If there have been ongoing problems, renewing simply because you’re worried about a vacancy may not be the right decision either.
The goal is to evaluate the entire relationship and not just the monthly rent.
Important Considerations
Putting an apartment back on the market can create opportunities, but turnover also comes with expenses.
Depending on the property, preparing for a new tenant may involve cleaning, painting, repairs, maintenance, showings, and potentially a period when no rent is coming in. These costs matter when comparing a renewal with a re-listing.
For example, the possibility of achieving a higher monthly rent can sound attractive. But if reaching that number requires spending money preparing the apartment and losing rental income during a vacancy, keeping a strong existing tenant may sometimes make better financial sense.
That’s why landlords should look beyond the rent number and consider the net result of each option.
The market that existed when your tenant originally signed their lease may not be the market you’re dealing with today. Before making a decision, take a close look at comparable apartments and what similar properties are actually renting for now. Condition, location, apartment size, amenities, and neighborhood demand can all influence what renters are willing to pay.
This is where local market knowledge becomes especially important. A landlord deciding whether to renew or re-list should be working with current information and not assumptions based on what the market was doing a year or two ago.
Sometimes renewing with a responsible tenant is the smartest move. Sometimes the numbers and circumstances point toward bringing the apartment back to market. And sometimes a landlord needs to rethink the terms of a renewal rather than viewing the decision as simply “stay or go.”
The important thing is to make the decision thoughtfully and early, with a clear understanding of the tenant, the property, the potential costs of turnover, and the current rental market.
Working with an experienced real estate professional can help landlords look beyond the monthly rent and evaluate the bigger picture – from current market conditions and comparable rentals to tenant history and the potential costs of turnover. Having informed, objective guidance can make it easier to weigh the options and choose the path that makes the most sense for the property.