Don’t let turnover get the best of you!

By Paul Branton, Director of Investor Services

While a quality long term tenant is a wonderful thing for steady rental income, don’t let it catch you off guard when a tenant decides to vacate. Plan accordingly and set aside funds each month for the “make-ready” as well as for renovations. 

At every turnover, there is necessary work to be done on your rental property. However, if you have a longer term tenant that decides to move, that often delays and typically increases the amount of work and time it will take to “turn” your property.

When preparing and planning, we’ve found a couple good “rules of thumb” to be: 

  1. Budget one month of rent per year for turn costs.  
    • Rent = $1,500 month and tenants stayed 4 years… expect about $6,000 in turn costs.
                  *Please note: turn costs do not include upgrades
  2. Allocate 1 day of vacancy time for the “make-ready” per $1,000 of work.   
    • $15k = 15 day timeline 

So for every year that a tenant renews, keep increasing your “make ready reserves” and as that number goes up, so will the time needed for the rehab. 

Here are a couple of projects that we wrapped up last week, both of which had long term tenants

Parkville: $25k in 25 days.   

  • New LVP Flooring (LR)
  • Bright White Kitchen with Granite & Subway Tile
  • New Bathroom Tile and Resurfaced Tub 

Parkville Pictures

Olathe: $35k in 45 days.   

  • Open sesame! (Opening up a wall.)
  • Updated Kitchen
  • Get out of Bathroom Jail! 
  • Deck Refinish

Olathe Pictures

Hope you enjoyed these photos and the tips on being prepared for when your properties turn tenants. Please let me know if you are interested in having us professionally manage your rental property!