Being a DIY landlord is all about balancing risk and reward. Real estate and the businesses associated with it, are investments, after all. The goal of every DIY landlord is to minimize risk and maximize reward, trying to get the highest return on investment (ROI) possible.
This process of renting a property to a tenant would be incredibly easy if every tenant decided to stay permanently (and keep everything in perfect condition, but that’s a different article altogether). Unfortunately, that almost never happens, leaving you to handle tenant turnover.
Turnover can be intimidating. If you’re new to being a landlord, you may be unsure how to make it work. Whether it’s landlord-tenant laws you are unfamiliar with, or simply how to fill the vacancy, guidance can be helpful. As we established earlier, renting is an investment, and an empty unit means the investment is not performing.
So, how do you handle tenant turnover efficiently? There isn’t a one-size-fits-all solution, but we developed key tips that can boost your confidence and get you ready to turn over your unit.
Complete a Move-Out Checklist with Your Current Tenant
Move-out checklists document the condition of the property. Ideally, you should fill out a move-in checklist and then complete it when the tenant moves out. This allows you to see how the condition of the property has changed since your tenant moved in.
Send Your New Tenant a Welcome Letter
Sending your tenant a welcome letter helps establish a positive landlord-tenant relationship. It also shows that you are a proactive, professional, and thoughtful landlord.
Beyond offering a warm welcome and setting an optimistic tone, a welcome letter allows you to remind tenants about your rules. For example, you can reiterate when rent is due and when trash pickup occurs.
At Avail, our tenant welcome letter includes information on:
- Utilities
- Renters insurance
- Key pick-up
- Move-in day
- Rent payments
- Maintenance
- Laundry
- Parking
- The neighborhood
Time is valuable to both you and your new tenant. By providing this information, you’ll help your tenant prepare for move-in day and you can save time answering questions.
Prepare the Unit
We recommend creating a cleaning protocol for your unit every time a tenant moves out. This will help you expedite the process, minimize expense, and ensure the best possible cleaning methods for your specific units.
It’s also important to be consistent with your cleaning protocol so all your rental units get the same quality of cleanliness. Plus, you can save time by not having to micromanage each step of tenant turnover. We recommend hiring a professional cleaning service. If you work with the same company each time, you can save time (and probably money).
You’ll also want to repair any damage. Providing a clean and undamaged space will go a long way in establishing a positive relationship between you and your new tenant.
If you plan to renovate the unit, you’ll want to schedule time for this during tenant turnover. This could be a major revision, such as changing the flooring or updating the appliances, or it could be something as simple as repainting the walls. Renovations are easier and faster when no one is living in the space.
Finally, you can change the locks and do your final checks to make sure everything is functioning properly. From ensuring there are no leaks or broken lights to testing all carbon monoxide and smoke detectors, this step is often last before considering the unit move-in ready.
Once you have evaluated the state of the apartment and made any necessary repairs, you can return the previous tenant’s security deposit.
Receive First Month’s Rent
You can finally see the light at the end of the tunnel. You’ve gone through 4 steps, said goodbye to your former tenant, opened a dialogue with your new tenant, established expectations, prepared the unit, and welcomed them into your community. All that remains is to collect first month’s rent and hand over the keys.
The key here — — no pun intended — — is to be patient and not skip steps. It is absolutely necessary to collect first month’s rent and a security deposit before passing the keys to a new tenant. And make sure the payment clears. In other words, don’t count your money before the check cashes. If you accept a check, but then it doesn’t clear, it may be too late and your tenant has already moved in. Keep in mind that it’s easier to stop a new tenant from moving in, rather than evicting a tenant who has already moved in.
Assuming the payment clears, provide a detailed receipt and keep thorough records. This is easy if you collect rent online and will provide peace of mind to both you and your tenants.
A final note to keep in mind is the difference between rent and a security deposit. In some states, it’s illegal to place these funds in the same account. Even if your state doesn’t require this, you may want to consider separating the two payments for organizational purposes. After all, you’ll be keeping one and (hopefully) returning the other.
Provide the Keys
Once you’ve gone through each step above, you’re ready to hand the keys over to your new tenant. This step should be relatively easy and painless. Congratulations!
Complete a Move-In Checklist with Your New Tenant
Once your new tenant moves in, it’s important to complete a move-in checklist. This step provides you and your new tenant with the opportunity to communicate upfront and, hopefully, avoid disputes over the condition of the property.
By allowing the new tenant to walk through their new home and make note of any pre-existing damage or inconsistencies, you give them peace-of-mind that they are protecting themselves in the long run. In a sense, you are establishing trust. They have the chance to note any problems with the unit, which relieves them of responsibility for those problems, while you receive a helpful list of pre-existing issues.
Once your tenant has performed their move-in checklist, and you’ve had a chance to look it over, you can establish a move-in date. Make sure to give yourself enough time to fix serious problems and prepare the unit before they move in.
Our Final Thoughts
Being a do-it-yourself landlord is all about balancing risk and reward. It’s easiest to do this if you’re prepared ahead of time. Be thoughtful and thorough before you find yourself in a difficult position.
Keep in mind that every landlord’s rental business is different. If you want further advice on how to customize your tenant turnover process, feel free to check out our resources or reach out directly.
About Avail
Until now, landlords with less than 10 units haven’t had access to online tools designed specifically for them. Avail is an intuitive app that helps you advertise vacant units, request tenant screening reports, sign leases, and collect rent — — all online. Today, 85,000 landlords use Avail because it’s the only end-to-end platform that helps them scale from beginner to professional with tools, support, and education.
Originally published at Avail.
