What New Landlords Get Wrong About Tenant Turnover And How To Fix It

So your tenant has given notice to leave. Was this a surprise to you or have you been expecting this? Whatever the case you now have a time sensitive job on your hands. If you are a new landlord then this can seem like a very complex task and a lot of moving parts to deal with all at once.

There are so many things that go wrong for new landlords during tenant turnover. But most of these problems are caused by systems that have not yet been put in place. These are problems that can be fixed.

Turnover Is More Expensive Than You Think

For those new landlords reading this article, it is so very important to have a solid grasp of the real costs of your rental properties. We have all seen statistics and studies claiming that a landlord can expect to lose a significant amount of rental income during a vacancy. But what is the actual cost of a single 30-day vacancy on a $1,500 per month rental unit?

To many new landlords, a single vacancy will seem to cost only the lost rent for the time that the property is unoccupied. However, in reality, there are additional costs that will be incurred in order to prepare the property for new tenants. Some examples of these additional costs are the cost of repairs, cleaning, showing the property to potential new tenants, and processing of new tenant applications. In the example given above, a 30 day vacancy of a $1,500 per month rental unit would result in a loss of $1,500 for the landlord before he or she spends a single dollar to ready the property for new tenants.

Fill it fast. Fill it with a good tenant. Get the old tenant out without a lot of hassle.

Common New Landlord Mistakes at Move Out Time: The Inspection

Don't let your first move-out inspection become a disaster. Insist that the move-out inspection be conducted before the tenant vacates the rental property. It is even better if you are conducting the inspection with the tenant present. That way you can document any damage found during the inspection against the tenant's move-in inspection findings. Also, be sure to have the tenant sign the move-out inspection report to confirm that they have been advised of any damages that they are responsible for.

The move-out inspection is another area in which many new landlords will go wrong. The new landlord makes his or her way to the vacant unit (often weeks after the tenant has moved out), conducts an inspection to see what work needs to be done to get the unit ready for new tenants, and spends days or even weeks trying to figure out who to hire to do the work.

HUD requires landlords and property managers to document the condition of rental properties at the time of move-in as well as move-out. This documentation can serve as evidence to disprove any false claims against the landlord's security deposit made by a tenant. In some cases, tenants will attempt to claim damage to a rental unit that occurred prior to the time of their tenancy in an attempt to receive reimbursement of part of their security deposit. By maintaining a complete, accurate and timely record of the condition of the rental unit at the start and end of a tenant's lease, the landlord can avoid unnecessary disputes regarding a security deposit.

Walk through with a checklist that covers:

●      Walls, ceilings, and flooring

●      Appliances and fixtures

●      HVAC filters and vents

●      Windows, doors, and locks

●      Plumbing and water pressure

●      Exterior if applicable

It's a good idea to document all the evidence you collected by taking plenty of photographs of the rental unit in its current state. The photographs should be dated as well as showing the extent of any wear and tear. This will then form the basis of the rental unit's ready for re-let.

Get Rental Properties Ready For Tenants ASAP

Below is a simple approach to set an attainable deadline for Move-In Ready. Start by outlining the checklist to detail the condition of the Rental Property Unit as noted in the inspection. Then, by working in reverse from your desired Move-In Day and knowing approximately how long to complete work of varying scope, and keeping vendors for corresponding work lined up all along the way, you can have your Rental Property ready to greet your new tenant on time and impress them too.

Average job time to paint an entire house is five to seven days, plus additional time for vendors to accept new jobs. Then there are bigger jobs including appliance, bathroom, etc. repair. These jobs need more time to repair and complete than smaller issues. And, in most cases, you will need to contact different vendors for these jobs.

Unfortunately most new landlords spend weeks looking around for the odd handyman and then get angry because work hasn't started yet. Build a short list that includes a handyman, cleaner, local plumber, local electrician, and a local HVAC contractor. In advance of needing work done, note the contact details for all possible contractors for all necessary work and obtain estimates from them beforehand. Make clear what is required and what the expectations for work quality, price, and timeline are before looking for any alternative providers.

Vendor Relationships Are a Competitive Advantage

Most professional property managers work all day and then call around to find a plumber after hours to fix a leaky sink. That is why they have built a good relationship with a good plumber in advance - companies like Priority One Property Management approach this by establishing vendor relationships well before any vacancy occurs. The landlord of a single rental unit can do the same thing. Get quotes for jobs that you know will need to be done from time to time before you need them. Introduce yourself to the vendors and save their numbers. The fact that you are a repeat customer will get you priority scheduling, fair prices, and someone who will be accountable to you.

You can set up your vendors for future work. For instance, having the handyman, a cleaner, a plumber, and the HVAC repairman all on speed dial for when you need them as well as having already received a couple of estimates for various repairs in advance will keep you ahead of the game.

Preventative Maintenance Beats Reactive Repairs Every Time

Change the filters every year (about $150 for the whole house) and have the HVAC serviced every year (same price). According to the National Association of Residential Property Managers, the annual cost to maintain a rental unit is about $1,200. That is well below the cost of a repair that occurs because you neglected to make routine maintenance.

Build a simple maintenance calendar for each unit:

●      HVAC service twice a year

●      Gutter cleaning each fall

●      Smoke and CO detector checks at every turnover

●      Water heater inspection annually

●      Pest inspection as needed by season

A well-maintained home signals to applicants that you are a professional landlord who takes care of things. This is a major selling point when looking for a home and can attract better tenants to your home.

Organizing The Turnover Process!

Not every landlord is able to handle the turnover of tenants in the best way possible. But those that do haven't gotten lucky; they have a plan, checklists, vendor contracts, and have created a list of steps to be completed within a given timeframe leading up to a new tenant's planned move-in date.

Managing the turnover of rental properties can be a huge hassle for many landlords. For others, the hassle can be too great and they end up hiring a property management company to handle everything. The thing that they don't know is that having a property management company can actually save them a great deal of time and can also save them a great deal of money as well. This is not about giving up control of your rental property. It is about having a system in place that will manage things for you even when things get tough.