Example of why landlords shouldn't be afraid of vacancies

[JD Martin]

Over the last month, we had an unusual situation in that 5 units all came vacant at (roughly) the same time as leases were ending; instead of tenants renewing, two bought houses, one couldn't navigate steps any longer, one changed jobs out of town, etc. With 4 of the 5 re-rented, the net cash flow increase was over $300 per month cumulative, and one of the units was in need of some rehab work, which the vacancy gave us the chance to complete. 

Most of our properties are not leveraged, so that is an advantage that someone with leverage might be missing somewhat, but even so other than the unit that needed rehab, all of the units had just a few days vacancy to allow for cleaning between tenants. 

Just thought I'd throw that out there, because there is a common fear especially among newer landlords of vacancies. Sometimes vacancies gives you a good chance to reset units to market rates, as my experience is that even the best landlords tend to lag market slightly for their good paying, stable tenants. 

[Ryan Murdock]

@JD Martin Good post and I agree, vacancy can be a good way to "reset" a unit to market rents.....although they are usually a lot more digestible for me one at a time as opposed to an entire building emptying out at once LOL.

Filling a vacancy quickly at a higher rent also gives me more confidence when considering rent increases within other units of the same building. 

In a 6 unit building if I have 5 identical units renting for $900/mo and I fill the one vacancy very quickly for $1000/mo I instantly have more leverage to raise the others closer to that $1000 mark as well. 

Conversely, if for some reason I can only get $850 for that vacancy I know I better leave the other ones alone at $900 for awhile.