Author Topic: How do you handle turnover?  (Read 1543 times)

Bearded Man

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How do you handle turnover?
« on: July 02, 2015, 12:03:54 PM »
My tenants of 2 years at one of my properties are looking to move to a bigger house with her sisters family. Their lease expired at the end of June, and they did not tell me that they weren't sure they were staying until I emailed them in late May, about a month before the end of their lease asking if they want to renew at the same rate (never raised their rent). They asked for a month to decide so I emailed them at the end of the month.

So it's official, they are moving, however; they want until end of August to stay. At first I was a bit hesitant since it doesn't leave me much time after they leave to turn the place, and may result in me trying to find tenants in October and November.

But then I thought, this is actually the right way to handle it. I should agree to let them stay month to month while I advertise and show the place - assuming it's presentable inside (have not been there in a few months). This way they win and I get the rent while I find another tenant. I could even charge a higher rent for the month to month for these two months. Their right to occupy the premises ended at the end of their lease, it did not convert to month-to-month and I have the right to show the property as per the lease agreement.

The crux of this plan though is making sure it is presentable/going down there and assessing the interior after providing the required notice to enter.

In any case, this seems like the best business decision. It keeps them happy, it puts money in my pocket, and I avoid a tenant gap. Thoughts?

Sigh, part of me hates this not only for the work and expense involved, but you come to know people and get used to them and grow in life with them. When they leave it's like a friend is moving on and it's another chapter in both of your lives. All around change and decay I see, though who changeth not, abide with me...


« Last Edit: July 02, 2015, 12:09:18 PM by Bearded Man »

zephyr911

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Re: How do you handle turnover?
« Reply #1 on: July 02, 2015, 12:21:36 PM »
Turnover is a fact of life in landlording. The longer you do this, the more you accept it. Don't take it personally. If the practicals are too much for you, there's paid management.

Bearded Man

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Re: How do you handle turnover?
« Reply #2 on: July 02, 2015, 12:32:16 PM »
Are you saying I'm too nostalgic about this? I don't take it personally at all. When I read their email, they were so sweet, they said they would like to stay until the end of August but are ready to move out now if they must. They complimented me for being a great landlord (that was my first rental property, I've officially been a landlord for two years now and have gathered more and am still adding to the collection). Even my gf said I did a great job along the way, I was quick to fix issues and keep them happy, on the rare occassion there was an issue.

I even told them that I although I hate to see them go I understand that people move on, but urged them to stay in touch if they ever move back to Alaska, where they are from originally. They were almost like friends to me, they were such nice and considerate people.

iamlindoro

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Re: How do you handle turnover?
« Reply #3 on: July 02, 2015, 12:46:58 PM »
I think what zephyr911 was getting at is that you seem to have too much personal investment in your partners in a business relationship.  My fear were I in your shoes would be that my affinity for the tenants would be compromising my decision making.  It's probable that the leeway you're affording them won't come back to bite you this time-- but what about next time?  I think it's critical not to consider your tenants your friends.  They may be perfectly pleasant-- but they're not your friends.

Fishingmn

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Re: How do you handle turnover?
« Reply #4 on: July 02, 2015, 01:07:32 PM »
You really need to have a defined process and follow it every time. Mine has resulted in almost no vacancy as new tenants usually move in the day after old ones move out. That said, it does help that I only do 12 month leases and don't allow month to month so I'm able to control the timing better.

- 60 days before end of lease I e-mail tenants with the amount of their new lease should they decide to renew. Most respond within 1-2 days to let me know if they plan to renew. The letter also explains that if they don't want to renew that I will be starting advertising by the middle of that month for a new tenant as I like to start looking about 45 days before a vacancy. If they are staying, get them a new lease ASAP and get it signed.
- If they are moving out get it in writing for both parties to verify that xxx 31, 20xx is their last day and they need to be out by xx time just to verify all parties understand.
- If they are moving, you need to schedule a time to go see the unit. You want to see how it's going to look for showings and whether it's going to be possible to move someone in within 1 day or whether you are going to need a month to refresh the place with repairs, cleaning, flooring or painting. Luckily for me, my units seem at attract tenants who want all of their security deposit back and most of the time they leave them in move in ready condition.
- You will want to have a discussion with the tenant about the need for showings. Also discuss things like carpet cleaning and find out if they are going to do it or you need to arrange it immediately after they move out. My lease has people move out by Noon the last day so I have a little gap that day to do it but carpet cleaners are slammed that day so you want to plan ahead early.
- Start advertising 45 days out and schedule showings. I try to group them if possible. Also, make sure to clear it with current tenants to approve the time - this also gives them time to clean it up for you.
- I assume you have a process for having potential tenants be screened, apply and sign lease so I won't cover that.

Good luck

Bearded Man

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Re: How do you handle turnover?
« Reply #5 on: July 02, 2015, 10:44:07 PM »
Oddly enough, that's about the process I follow. Normally I email two months before end of lease, this year between a new job, trying to buy another rental and grad school, I was a bit slower to get to it. Earlier this morning I emailed them essentially what you said above (though I had not read it at the time).

I told them it's fine to stay until the end of August, that I will be advertising the place and might show to prospective tenants with notice, and that I would be stopping by soon to checkout the interior to see what I need to do to turn the place. My add on CL had completely disappeared, so I had to post from a new one but I used verbiage from another post that was expired but still visible in my account. Had two respondents within an hour. I even raised the rent $50 in the post. Oh, and I also noted that their last months rent carried forward from their first year and since they already paid for July, no need to pay for August, and that their security deposit will be refunded shortly after move out - pending move out inspection.

I actually sent them that right before I posted my second post in the thread. It just made sense to do it this way, and seeing your post, reassures me. Ah, I miss that old house too, looking at the pictures of it in my advertisement reminds me of when I lived there for over 2 years in my late twenties. My first house, paid in cash. I had a lot of memories in that house. Learned a lot about home ownership. The journey continues.

I honestly do care about these people, I just wonder how they will turn out years from now. Looks like they'll be moving in with family after a divorce; save money, finally get ahead.