Having a high tenant turnover can cost property owners thousands of dollars but by being more efficient, understanding where your expenses are coming from and understanding the trends that impact tenant turnover, you’ll be able to minimize tenant turnover and increase retention rate.
The Costs Associated with Tenant Turnover
When a tenant moves out of your rental property and there’s a gap between the time the new tenant moves in, the obvious cost of vacancy is the lack of cash flow. But even if you don’t have any gaps between tenants, there are still several costs associated with tenant turnover.
Some of these costs include:
Administrative Costs – The time it takes to market your empty property, process any paperwork, find new tenants, and make repairs costs money. If your tenant is moving out, try to complete a walkthrough of the property prior to the current tenant moving out to identify any repairs that will need to be made. If a majority of them are small, quick repairs, make them while the new tenant is living there to maximize your rental income.
Lost Income – If you have a mortgage payment on your property, losing the income from having a vacant rental property can make a difference in whether or not you pay your mortgage on time. If possible stay ahead of the process and require all tenants to provide a 30 or 60-day notice of moving out to avoid losing any income.
Disgruntled Tenant Costs – Are you on bad terms with your current tenants? This could also cost you! If they’re leaving on bad terms, it’s possible that there might be damage to your property beyond normal wear and tear, which will cost YOU more money. To help avoid this, always have open communication with your tenants.
Repair Costs – Is there a gap between your old tenants moving out and your new tenants moving in? Although you’re losing out on rental income, it’s the perfect time to make repairs and tackle any remodeling projects (even if they’re small!). Keep in mind that this will cost you more money, but you might as well take advantage of the situation.
How to Prevent Tenant Turnover
The best way to prevent tenant turnover and have the best profits is to keep your tenants as long as possible. There are some circumstances you might not be able to prevent but with these tips, you’ll be able to prevent local moves!
- Always communicate with your tenants in a timely manner when they inquire about maintenance, repairs, and general questions
- Make sure your rental property is priced at a fair market value
- Don’t let the property fall into disrepair or too outdated; both of these factors will have an effect on how long a tenant stays in a unit
- Properly screen your tenants to help prevent any issues (i.e. non-payment, excessive damage, etc.)
Amenities Tenants Love (& Will Help Reduce Tenant Turnover)
- Parking (on-street or off-street, as long as it’s convenient!)
- Outdoor space (patio, balcony, or yard)
- In-unit washer and dryer
- Modern updates
- Energy saving appliances, thermostats, and light bulbs
Ready to reduce tenant turnover and increase your income from your rental property? Call Lamacchia Property Management today at (855) 213-3410 today to learn more about our services.