Landlords and property investors are all too familiar with the negative financial impact when they lose a tenant, especially if it has been someone who never caused problems and always paid their rent on time. Unfortunately, tenants of this caliber are few and far between anymore. Once they have moved, you’re going to lose at least one month’s rent (and maybe more) during the transition period. However, that impact can be even greater when examining the big picture.
For example, property management companies and specialists know that the following issues can arise whenever a tenant moves out and the property remains vacant for longer than a month:
- Administrative fees – Numerous hours are involved with scheduling cleaning, maintenance, and repairs, managing inspections, screening prospective new tenants, drafting a lease, meeting with new tenants to review and sign the lease, processing the paperwork, and more.
- Advertising costs – While you can occasionally find FREE listings, most advertising has a specific cost attached, especially if it is local media such as printed publications, radio ads, and TV ads.
- Cleaning, maintenance, and repair costs – While some landlords/property investors will attempt to do their own repairs, others will rely on professional contractors or property management companies to handle these issues. In some cases, the tenant has left behind so much damage that the repair costs very high.
- Screening process – The more rigorous the screening the process, the greater the likelihood of finding a better tenant to rent your property. If done properly, the screening process requires a lot of due diligence and time. This includes driving back and forth from the rental to show the property, reviewing numerous applications, and running background and credit checks.
If you’re the landlord or property investor, it’s in your best financial interests to retain your tenants and shorten all vacancy cycles. For those rental property investors that want nothing to do with the many headaches involved with managing their rentals, you should consider consulting with and hiring a qualified property management team. It’s a shame that many landlords and property investors fail to realize that they are managing a business and that their tenants are their customers.
This is the primary reason that tenants move and rental properties stay vacant far too long. The smart landlord or property investor will work with a professional management firm or team to ensure that tenant retention increases and vacancies decrease. The right property management company will keep your costs to a minimum while helping you to increase the value of it in the process of managing it. Most importantly, sound property management will ensure that your investment is safe and well protected.