Cost of Tenant Turnover – Tenant looking for Rental

Tenant turnover is perhaps the greatest obstacle that exists between the landlord and solid profitability. What is tenant turnover? Tenant turnover includes all the costs that are applicable between the period a tenant moves out and the prospective tenant would eventually move in. Eventually is the keyword here, because there is still a lot of uncertainty, and landlords often struggle to find a replacement tenant looking for rental with immediate effect. These costs often result in decreasing productivity because of additional costs, and this may not be part of the landlord’s plan. Let us run through these costs and see what we discover.

Lease-up Fees

Property managers generally charge a certain amount of lump-sum lease-up fees for every tenant that’s brought in. This fee could amount to the rent payable for an entire month. This varies and depends particularly on the terms that have been decided upon at the start. You can be sure though, lease-up fees is a major expense that is applicable whenever the landlord is in need of a tenant looking for rental.

Marketing Costs

The expenses you incur in the search of the perfect tenant looking for rental. These costs could include:

• The fee that you pay to post an advertisement on an online rental website

• Cost of printing flyers

• Running an ad in the newspaper

Loss of Rental Income

Naturally, the vacancy period would not fetch you any rent. This essentially reduces the profitability of a rental property. This is unavoidable as a tenancy would often run its course, and the only way to negate its impact would be to ask the tenant to give a month’s notice period before they leave.  Once you are aware that the tenancy is about to come to an end, it would be better to be proactive and start looking for a tenant that’s looking for a rental.

Application Processing Expenses

The correct way to consider (and approve) suitable tenants would be to properly check their profile. The profile of a prospective tenant would include their criminal record, credit score, verifiable income and earlier rental history. These reports cost money to generate and verify, further adding to the burden of rental turnover.

Touch-Up Costs

Lastly, it is critical that the prospective tenant looking for rental finds your property appealing for their tenancy. This, however, consumes money because the expenses applicable here would include repair-work, cleaning, and even minor renovation if need be. These expenses should not just be looked at as a burden because these expenses improve the long-term health of your property.

Seems complicated, doesn’t it? These responsibilities are tiring and stressful. There exists an alternative to this. Have you ever considered hiring a property management company instead?

Come to think of it, this saves you a lot of paperwork hassle, and you could hold the company responsible for these functions instead. Talking about responsibility, the ever so reliable, Rental Advisors have been offering their property management contracts, and they also help suitable landlords and tenants discover each other.