Turnover is best avoided when you’re renting out a property, but every landlord knows that they’re not going to keep their tenants forever. Eventually, your residents will move on, and you need to be prepared for how you’ll move through the turnover process.
This is an expensive part of renting out a home. Once your tenant leaves, you’ll need to take care of any wear and tear that was left behind. You’ll need to get the property ready for the next tenant. It takes time, vendor resources, and money.
We know that every dollar counts, and that’s why we’re talking about tenant turnover costs. First, we’ll discuss what you can expect to spend, and then we’ll share some tips on how to save money during this process.
Understanding the Cost of Turnover
The costs of your turnover process will depend on your property and how long you had your departing tenants in place. Here are the costs you can expect when you’re moving one tenant out and preparing for another to move in.
- Turnover Leads to Vacancy
The first major cost you’ll encounter during your turnover is vacancy. There’s no rent coming in, and that’s obviously going to hurt your cash flow. It’s also going to be a bit of a drain on your long-term ROI. Your property’s profitability depends on consistent rental income.
- Paying for Utilities
There’s also the cost of utilities to consider. When your tenants aren’t in place and there’s no one else to continue paying the electric bill, the water bill, and the gas and trash bills, you have to cover them yourself as a property owner. You never want to leave the utilities turned off during your turnover period because vendors and contractors will need electricity. When new prospective tenants come to see the home, they’ll want to turn on lights and run water in the sinks.
- Turnover Maintenance and Repairs
During the turnover period, you’ll also incur the cost of making the property ready for the Santa Cruz rental market.
This includes general wear and tear and any maintenance that’s needed due to property damage. You might need to paint, clean the carpet, and make some upgrades and updates that will make the home attractive to your next tenants. You want to make it rent-ready, and that’s going to cost some money.
To remain competitive in the Santa Cruz rental market, your property has to be modern and inviting. This might require some updates and upgrades.
The best time to take care of these things are during a turnover period. There isn’t a tenant in place, and you have the time and space to make minor renovations. These updates will likely help you earn more in rent, but there is a cost associated with making them.
- Turnover Cleaning Costs
Perhaps the final turnover cost (outside of marketing and screening for new tenants) is the cleaning that you’ll need to do. Have your professional cleaners go through the property and make it shine.
Depending on your property, a turnover could cost a few hundred dollars or the equivalent of four months’ rent. It really depends on the general condition of your home and what it needs to be rent-ready.
Saving Money on Santa Cruz Tenant Turnovers
Turnovers do not need to be stressful, and you don’t have to overspend.
As experienced Santa Cruz property managers, we’ve put some processes into place that keep turnover costs lower for our owners and investors. Here are some of the things you can do to achieve similar results without sacrificing all the high quality work that needs to be done during the turnover process.
- Develop Relationships with Good Local Vendors
It’s essential to have a preferred network of vendors and contractors who can respond right away when you need work done at your property. We provide a large volume of work to the vendors we work with, which results in lower prices and discounts. They’re also willing to prioritize our projects, getting into our rental homes quickly. You need some similar perks from your best vendors if you want to contain costs.
Don’t start looking for your vendors when you’re ready to begin a rental property turnover. You’ll need to have relationships in place already. Look for reputable workers who are licensed, insured, and capable of providing high quality work. Your turnover process will be less expensive, faster, and more reliable.
- Schedule Immediate Move-Out Inspections
In California, you’re required to offer a pre-move out inspection to your tenants. A lot of landlords see this as a burden, but it’s often a great opportunity. You’ll get an understanding of what you’ll need to do during the turnover process. During this inspection, you can evaluate your need for painters, carpet cleaners, landscapers, or someone to look at the roof. A plumber may be necessary if a sink is dripping. You can check the appliances and decide if any of them will need to be replaced.
Encourage your tenants to schedule the pre-move out inspection with you. If they don’t, try to inspect the property within 24 or 48 hours of your tenant moving out. This will give you a jump start on the turnover process and help you move through it faster, which saves you money on vacancy.
Make sure you’re holding your departing tenant accountable for any damage that they should pay to repair. You can make deductions from the security deposit as well; they’re well-documented.
- Be Consistent with Turnover Materials and Buy in Bulk
Most rental property turnovers include a fresh coat of paint. As you probably know, paint is expensive. Use the same color of paint for every rental property you own. This will eliminate the need to buy different types and shades.
The light bulbs you’re using can also be uniform across all rooms and properties. Invest in the LED lights so they don’t have to be replaced as frequently.
If you hate replacing or cleaning the carpet during every turnover, consider transitioning to hard surface flooring the next time you’re preparing the home for a new tenant. There is far less maintenance, you’ll get more life out of the laminate you use, and tenants will appreciate those floors when they’re looking at your rental home.
These are a few tips that can help you keep turnover costs down. If you have any questions about what you are likely to spend on your own turnover and how you can make the process a little less expensive, we have more to tell you. Contact us at Portola Property Management.