Landlord + Tenant

Renewal Rate Figures in Property Management: What They Actually Mean

By TenantCloud Team March 26, 2025

If you’re a landlord or property manager, there’s one number that quietly tells you more than most reports combined: your renewal rate. It shows how many of your tenants choose to stick around at the end of their lease. But beyond that, it reveals how well your properties are being managed, how happy your tenants really are, and how stable your income will be over the coming year.

With renewal rates on the rise across the U.S., it’s important to keep yours high, as it typically means fewer headaches and better long-term profits. In this article, we cover the subject in some detail, including how to calculate renewal rate figures accurately and what a good renewal rate looks like.

A strong customer renewal rate is one of the most important metrics in the business of renting homes. If you’re not actively tracking and working to improve it, you could be leaving money on the table every single month. So, let’s dive in!

Why Is Renewal Rate Important?

Your renewal rate, what does it mean in real terms? Well, it’s a number that represents the percentage of tenants who decide to stay in your property by signing a new lease. If you have 30 tenants whose leases are ending in a given month, and 21 of them choose to stay, that gives you a renewal rate of 70%. This one figure tells you more than just who’s staying. It reveals how you’re doing as a landlord.

Why does it matter so much? Because every time a tenant leaves, there’s a cost. You lose recurring revenue. You may go days, weeks, or even months with that unit sitting empty. You need to clean it, possibly repair it, advertise it, screen new tenants, and go through the entire onboarding process again. Multiply that by a few properties, and your revenue can take a substantial hit.

A High Renewal Rate = Happy Tenants

A high renewal rate also usually means better customer satisfaction. Of course, it stands to reason that if tenants are happy, they stay. That boosts your retention rate and also helps to reduce your churn rate - two key indicators of a stable and growing rental business. Satisfied tenants are more likely to leave good reviews, recommend your property to others, and report fewer issues.

There’s also a connection to customer success. When you manage your properties well, respond to maintenance quickly, and treat tenants fairly, they’re more likely to see value in staying. Long-term tenants tend to take better care of the property and require less intervention, helping to protect your long-term property finances.

In many cases, your renewal rate will also inform how aggressively you need to market your properties. If renewals are high, you may not need to pursue as many new leads, giving you more room to focus on improving the tenant experience and maintaining your existing customer base.

Pro tip: A dip in renewal rate is rarely random. Check for slow repairs, steep rent hikes, or missed communication, as small fixes can go a long way.

“Renewal Rate Calculation - How Do I Do It?”

Don’t worry if math isn’t your strong point, as it’s pretty easy to calculate renewal rate figures. To do so, you just have to use this simple formula:

Renewal Rate = (Total Number of Renewals ÷ Total Number of Leases Expiring) × 100

If 40 tenants’ leases expire in July and 32 decide to renew, that’s:

(32 ÷ 40) × 100 = 80%

That’s your customer renewal rate for the month. Over time, tracking this helps you see whether your retention strategies are working. If the number is dropping, it’s time to investigate and here are just some of the things you should be keeping your eye on:

Are rent increases too steep or poorly communicated?
Are maintenance issues being resolved quickly enough?
Are tenants given enough time to respond before renewal?
Is the renewal process clear and straightforward?

Tracking these numbers across properties helps you assess overall customer retention and make adjustments based on trends. You can go deeper with the metrics you monitor, with some professional landlords also choosing to track:

Gross renewal rate (how much recurring revenue is retained)
Net revenue retention (includes expansion revenue)
MRR renewal rate (for systems that track monthly recurring revenue)

You might also monitor your subscription renewal rate if tenants sign up for bundled services or other value-added features. These insights can improve your understanding of tenant behavior and sharpen your long-term strategy.

Pro tip: Don’t let the math put you off. Most quality property management software platforms will track renewal rates for you. The key is knowing what the number means and what to do when it changes.

What Are the Benefits of a High Renewal Rate?

When you have a high renewal rate, you get a great deal of peace of mind. That’s because you’ll also typically get to enjoy more predictable income and better long-term margins. Let’s take a look at what that looks like for landlords in practice.

Lower Workload

When tenants renew, it reduces the admin strain on you and your team. There’s less back-and-forth with listings, fewer showings, and no need to onboard new renters. That frees up time to focus on improving tenant experience and managing growth.

More predictable revenue

With fewer vacancies, you can depend on steady monthly recurring revenue. This allows for smarter planning, budgeting, and reinvestment in your properties. If you need help structuring your approach, our breakdown of property finances offers useful tips on managing costs and improving cash flow.

Increased Customer Lifetime Value

Tenants who stay longer generate more income without added acquisition costs. That lets you build higher total revenue over time with less effort. In terms of your finances, it’s a win-win at every turn.

Better Tenant Relationships

There’s no two ways about it - long-term tenants are easier to manage. Not only are they familiar with how you work, but they’re also more likely to report issues early and provide customer feedback on a regular basis.

Improved Customer Loyalty

When you have tenants who renew with you year after year, they’re far more likely to recommend your property, as well as tolerate minor rent increases, and stick with you through thick and thin. Customer loyalty truly is a valued commodity - particularly in the rental market.

Better forecasting

Another way in which you’ll benefit from high renewal rates is a reduction in the guesswork you have to do in projecting your future rental income. This helps with everything from staff scheduling to future upgrades and expansion plans.

Pro tip: If one of your properties has a much higher renewal rate than others, look at what you’re doing differently there and then apply those lessons across the board.

What Causes a Low Renewal Rate?

A low renewal rate rarely happens by accident. Of course, not all of the reasons behind them will be within your control, but being aware of them is crucial. If your rate starts to drop, the culprit will typically lurk in the following areas:

Poor communication - Failing to notify tenants about lease renewal timelines or changes can leave them confused and more likely to walk.
Unresolved maintenance issues - Slow repairs damage customer satisfaction and cause frustration that adds up over time
Unexpected rent hikes - Raising rent without explanation or clear value added can damage customer loyalty and increase your churn rate.
Lack of incentives - If tenants don’t see any benefit to staying, even small perks, they’ll be more inclined to leave.
Ignored feedback - If your tenants voice concerns and nothing changes, they feel undervalued. That undermines customer retention and your retention rate.

Pro tip: When your renewal rate drops, consider asking exiting tenants “Why?”. A quick exit survey can reveal issues you’ve missed and show you exactly where to focus.

How to Improve Your Renewal Rate

The good news is you don’t always need a major overhaul to raise your renewal rate. Sometimes, it’s about fine-tuning your approach and focusing on the bigger picture. The following actions can help you build stronger tenant relationships and keep good renters in place for longer:

Streamline your renewal workflow - Automate things like renewal notices, lease generation, and e-signatures. This will not only save you time but also create a smoother tenant experience.
Use tenant data to stay ahead - Don’t wait for a drop in renewals to start looking at trends. Use software to flag patterns in tenant behavior, spot at-risk leases, and plan ahead.
Personalize your offers - Long-term tenants often appreciate tailored lease terms, small loyalty perks, or flexible renewal options. A generic offer feels easy to walk away from, however, personalization adds weight.
Strengthen the sense of belonging - Make sure your tenants feel more than just “housed.” Clean, safe spaces and consistent communication help build a sense of community that encourages them to stick around.
Show the value of staying - If you’re having to increase rent, make sure tenants understand why. Show how you’re reinvesting in the property or improving service levels. People are more willing to stay when they see the value.
Build in mid-lease check-ins - Think about reaching out well before lease-end to see how things are going. These touchpoints help you fix small issues early, gather useful feedback, and reduce surprises when renewal time comes.

Pro tip: Here is how to improve your renewal rate, starting with creating a positive tenant experience.

Getting Your Renewal Rate Where It Needs to Be

Your renewal rate isn’t just another number on a spreadsheet. It’s one of the clearest indicators of how well you’re managing your properties, and treating your tenants. High renewal rates lead to stronger retention, better customer satisfaction, and more stable recurring revenue - all of which support long-term growth.

As such, you shouldn’t leave it to chance, meaning you need to do everything you can to make lease renewals easier, offer incentives where appropriate, and pay attention to customer feedback. Also, when you use tools that offer automatic renewals, track your revenue renewal rate, and provide insights into your customer base, the whole thing gets easier.

A platform that offers this and more is TenantCloud - with software designed to help landlords stay organised, improve tenant communication, and manage lease renewals more efficiently. It includes tools for tracking retention rates, handling lease data, automating rent collection, processing maintenance requests, and simplifying accounting - all in one convenient place.

To find out more about the many features on offer, browse our website and see how TenantCloud can help you. Alternatively, to speak with our team about your needs, call 1-737-300-9331 today, and they’ll be delighted to help you in any way they can.