Tenant Turnover Q's: timeframe and cost expectations

[Dean Valadez]

Hello,

I have been hearing on BP podcasts that tenant turnovers can equal about $6000-8000 (one host even said up to $10k, if I recall correctly) when lost rent and repair/upgrade costs are factored together. That seems quite high and I wanted to see what some of you experience. I searched for turnover answers but some of the posts were either old, or did not have exactly what I was looking for. I am fortunate to not have had tenant turnover yet and I PM my own four-plex and single family rental. I am simply pre-planning should I have a tenant move out in the future after their lease expires and they don't want to renew. I realize there are a lot of variables at play during turnovers, such as:

- What was the condition prior to tenant move-in and what is the condition after move-out?

- What property class is the rental (A, B, C, D)?  that could determine the quality level the unit needs to be at for a new tenant

- Am I doing the work myself, or hiring out?

- Is there a lot of updating that needs to be done to the unit?

- How long the unit sits vacant for repairs/cleaning, and finding a tenant

- City/town/state the unit is in

Please respond with your thoughts, hopefully with the bullet points above as points of reference and stated as such in your reply (I know, I am asking for a lot from you all :) ) But, for example, a Class D property in Milwaukee, WI probably requires less turnover time, lower quality materials, not as precise of a paint job, etc, than perhaps a Class A property in San Francisco, which would require higher quality materials, higher labor costs, longer vacancy since more precise craftsmanship would be required, etc. Thus, if the owner of their Milw, Class D property replied without noting the above, he/she might say it only costs $1000, whereas the owner of the SF Class A property might say, $10k, but if I didn't know their location, property class type, if they used contractors, or did the work themselves, etc., then I would still have too wide of responses to be able to anticipate what the real costs might be for my particular situation, property, etc.

For reference, my properties are in Class B areas of Milwaukee. I acquired the four-plex with varied levels of updates, but would need/want to paint cabinets, paint doors, trim, walls; if carpeted, replace carpet with LVP; replace faucets with modern faucets, etc. Some work I can do myself, but for time purposes, would hire out. Units are in good shape otherwise, besides those cosmetic/outdated issues.

Thanks for any input you all can provide!

[Nathan Gesner]

Quote from @Dean Valadez:

I don't know exactly what the podcast host said, so I can't address that. I suspect they were talking about difficult turnovers with problematic renters, bigger repairs, heavy cleaning, maybe some missing rent, and longer vacancies. 

I manage around 400 residential rentals. Most of my turnovers cost me $0. About 80% of my tenants get a full refund. Of those that require repairs, everything is covered by their deposit. Less than 1% of my tenants leave owing more than their security deposit will cover.

Screen well. Inspect regularly. Document thoroughly. Establish policies and procedures that nip problems in the bud. If you do these things right, you won't lose much on turnovers.