One of property managers‘ and landlords‘ greatest asset is a good tenant. While we know that having good tenants is valuable, it may be unclear why finding new tenants and turnover can be costly. ManageCasa brings you a deep-dive into the costs associated with tenant turnover. By understanding the sources of costs, perhaps property managers and landlords can find ways to minimize these costs during periods of tenant turnover.
1. Vacancy
The biggest cost is the lack of income from a unit for one or more months. This disrupts your cashflow and interferes with normal accounting procedures.
2. New Applications
With new applicants, costs rise from running new credit and criminal background checks, verify work and income information and process the application. This is usually more of a time-cost on the property manager and landlord.
3. Repair and Maintenance
After a tenant departs, there are certain maintenance work required. At the very least, it is a deep cleaning. Often times, property managers and landlords also need to contract painting jobs or unit-upgrades to make the unit more desirable on the market.
4. Advertising
There is a cost associated with advertising the unit. Property managers and landlords may need to run print and web based classified ads, put up signs, etc.
5. Open-House and Showings
Along with advertising, it costs time and money to complete open-houses and showings, for this means someone will be manning the phone for interested tenants, and taking the time to schedule and attend appointments.
6. Administrative costs
The last cost includes one of time and personnel you need to process the exit of old tenants and new tenants.
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