Building God’s Temple & Lease Extensions: Are You Ready?

 

“King David rose to his feet and said: “Listen to me, my fellow Israelites, my people. I had it in my heart to build a house as a place of rest for the ark of the covenant of the Lord, for the footstool of our God, and I made plans to build it. ³ But God said to me, ‘You are not to build a house for my Name, because you are a warrior and have shed blood.’”

(1 Chronicles 28:2-3)

 

“If you fail to plan, you are planning to fail.”

Benjamin Franklin

 

King David loved God; they were tight.  Towards the end of his life, he wanted to do something grand for God- so grand that he aspired to build the greatest temple in the world for Him!  David shared this with Nathan, his resident spiritual advisor, and asked him to see if God would approve.  Nathan inquired and relayed that God was not amenable to King David doing it; however, He told him that Solomon, his son and future successor, could build it.

 

King David did not use this as an excuse to sit on his hands.  He asked God exactly what He wanted and proceeded to write down specific plans for Solomon to use.  He not only detailed plans to build the temple and the surrounding buildings themselves, but for the all the items that would be kept in the temple.  He mapped everything out precisely, even the weights of the lamps and tables and how the priests who would work there would contribute.  All Solomon would need to do is dust off the plans and enact them when he was coronated.  He would be ready to go!

 

For smart landlords, this is how lease extensions should be approached.  When leases are expiring in the near future or tenants are proactively in contact about extending their leases, landlords should not be scrambling!  A well-thought-out plan should be in place ready to be enacted.

 

As a Charlotte property manager, retaining good tenants is paramount.  If we don’t hear from tenants prior to 80 days before their leases’ expiration, we start the “Lease Extension Plan”.  This begins by running the nearby comparables to determine market price, checking their payment ledger to ascertain tenant quality, and making a recommendation to the owner on what we feel the lease extension price and terms should be.

 

Once we have finalized our lease extension offer, we e-mail it to the tenants somewhere between 60-75 days prior to lease expiration.  This gives them plenty of time to ask any questions and make a decision.  We also incentivize tenants to commit earlier as the proposed rental price is offered in tiers based on when they let us know their plans (example: “Let us know by 6/15, and the price will be $1,500.00/month… or if after 6/15, the price will be $1,600.00/month.”).  We also offer options for month-to-month lease extensions (at a 10-20% premium to the existing rent based on current market conditions) and multi-year extensions (incentivized by allowing the rent to stay the same over the life of a longer lease term). 

 

Other important factors we incorporate in the “Lease Extension Plan”:

 

1. The new lease is written on the latest version to make sure that the owner has the best legal protection incorporating any recent changes to landlord law
2. The tenant information is updated:  Did anyone leave or is now joining the household?  Did anyone get married/divorced?  Name change(s)? New children?  New pets to be accounted for?
3. Are there any issues that we want to address with the tenant (or vice-versa) before we reup with them for another year or more?

 

Though King David was disappointed he would not be the one to build the temple, he made sure approved plans were prepared and ready when Solomon got the green light.  Smart landlords will follow his example!  With increased repair costs on rental home turnovers, keeping tenants by signing lease extensions is becoming more and more important to achieve rental home ROI.

 

Happy Landlording!