A lease renewal is cheaper than a turnover. Every time a tenant leaves, you face vacancy loss, turnover costs (cleaning, repairs, marketing), and the risk of placing a less reliable tenant. Smart renewal strategies keep good tenants in place while growing your income.
The True Cost of Turnover
Most landlords underestimate how expensive tenant turnover really is. In Montgomery, the typical turnover costs $2,500–$5,000 when you add up: 2–4 weeks of vacancy ($500–$1,200 in lost rent), make-ready repairs and cleaning ($800–$2,000), marketing and showing costs ($200–$500), tenant placement fee (50–100% of one month’s rent), and administrative time for applications, screening, and lease execution. A single turnover can wipe out 2–3 months of net cash flow. By contrast, a well-handled renewal costs almost nothing.
Start Early — 90 Days Out
We begin the renewal conversation 90 days before lease expiration. This gives tenants time to plan and gives us time to market the property if they decide to leave. Waiting until the last month creates unnecessary stress for everyone.
Our renewal timeline works like this: at 90 days, we send the initial renewal offer with the proposed new rent and lease terms. At 60 days, we follow up with tenants who haven’t responded. At 45 days, if the tenant declines or hasn’t responded, we begin marketing the property. At 30 days, the signed renewal should be in hand, or we’re actively showing the property to prospective tenants. This cadence minimizes vacancy regardless of the outcome.
Build in Rent Increases
Annual rent increases of 3–5% are standard and expected. For Section 8 properties, we submit rent increase requests to the Housing Authority aligned with FMR adjustments. For market-rate tenants, we base increases on local comparable rents. The key is being transparent and reasonable — a modest increase is always better than a vacancy.
Here’s the math: if your property rents for $1,100/month and you raise rent by 4% ($44/month), you gain $528/year in additional income. If the tenant leaves because you raised rent by too much and you face a one-month vacancy plus turnover costs, you’ve lost $3,500+. The sweet spot is an increase that grows your income without triggering a move-out.
Section 8 Renewal Considerations
Section 8 renewals work differently from market-rate renewals. The Housing Authority of the City of Montgomery (HACM) conducts annual recertifications and inspections. To maximize your rent increase on a Section 8 property: submit your rent increase request 60–90 days before the HAP contract renewal date, base your request on current Fair Market Rents and comparable properties, ensure the property passes HQS inspection before the renewal date (failed inspections delay rent increases), and provide documentation of any improvements you’ve made to the property. James-Hawkins handles all Section 8 renewal paperwork and housing authority communication on behalf of our owners.
Reward Good Tenants
A tenant who pays on time, maintains the property, and communicates respectfully is worth keeping. We work with our owners to offer incentives for renewal when appropriate — minor cosmetic upgrades, a small rent concession, or simply a positive renewal experience.
Effective incentives don’t have to be expensive: a fresh coat of paint in a room of their choosing ($150–$300 cost, massive goodwill), a new kitchen faucet or upgraded light fixture ($50–$150), a carpet cleaning or professional yard treatment, or even a simple thank-you note acknowledging their tenancy. These small gestures signal that you value the relationship and can make the difference between a renewal and a turnover.
When Not to Renew
Not every tenant should be renewed. If a tenant has a history of late payments, lease violations, property damage complaints from neighbors, or failed inspections, a non-renewal may be the right move. James-Hawkins tracks tenant performance throughout the lease term, so the renewal decision is data-driven, not reactive. We provide owners with a recommendation for each renewal based on the tenant’s complete history.
Frequently Asked Questions
How much should I raise rent at renewal?
In Montgomery’s current market, 3–5% annual increases are typical and well-received by tenants. Keep your rent aligned with comparable properties in the area — pricing above market risks turnover. For Section 8 properties, your maximum rent is capped by the Housing Authority’s payment standard, which is based on HUD Fair Market Rents.
What if my tenant wants to go month-to-month instead of signing a new lease?
Month-to-month arrangements give tenants maximum flexibility but give landlords less predictability. If you allow it, consider charging a premium ($50–$100/month above the standard rate) to account for the increased vacancy risk. Most landlords prefer 12-month renewals for income stability.
Can I change lease terms at renewal?
Yes. The renewal is essentially a new lease agreement. You can update terms, add clauses (like a pet addendum), adjust the security deposit to reflect the new rent amount, or make other changes. The tenant is free to accept the new terms or decline and move out.
What notice do I need to give for a non-renewal in Alabama?
Alabama does not require landlords to provide a specific notice period for non-renewal of a fixed-term lease — the lease simply expires on its end date. However, best practice (and what James-Hawkins does) is to provide at least 60 days’ notice of your intent to not renew, giving the tenant adequate time to find new housing.
James-Hawkins manages the entire renewal process — from initial outreach to executed agreement. See our full service breakdown.
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