Quick-turning an Austin rental home – pros and cons
I moved two new renters in on Sunday July 1st. Both moved into homes that had been vacated by tenants with leases ending Saturday June 30th. There are all manner of things that can go wrong with such a tight turnaround, especially on a weekend.
Nevertheless, I’ve always been a proponent of quick-turning a rental unit whenever possible. The most I ever did was 12 next-day turnovers on May31/June1 back in the year 2000. That was pure madness, and I was still out checking up on the properties, painters and my carpet people at 1AM on the 1st. It didn’t go perfect, but everybody got moved in and the loose ends and problems were resolved soon after. Primarily though, those 12 property owners did not suffer one single day of vacancy loss. That’s a touchdown no matter how ugly.
There are many Property Managers in Austin, and around the country, who won’t offer a first of the month move-in on occupied rental homes. Instead, they will set the availability/move-in date for the 5th, or later, and turn away renters who absolutely must be in on the 1st. These property managers have a great deal more sanity than me, and I fully understand and agree with the premise under which they have formed this policy. It’s a policy of chaos avoidance. It’s running and managing the turnover process in a way that eliminates most of the uncontrollable factors that come with a fast turnover.
Since one never knows for sure in advance the condition a departing tenant will leave a property, it’s difficult to pre-schedule and allocate the resources that will be needed for a smooth turnover process. And yes, some of these turnovers can be very difficult to manage. So a good, well organized property manager who likes to keep things under control will be very hesitant to subject themselves to such chaos.
But personally, I don’t mind the chaos as much as I dislike vacancy. A vacant home is a landlords’ worst enemy, period. I’ll trade all the chaos and problems of short turnaround in favor of avoiding vacancy loss any day. In fact, if I could own/manage a rental portfolio where there were only quick-turn move-ins, I’d gladly take it over the potential vacancy loss that results from avoiding such chaos.
Let’s look at how this works. First, when an interested tenant wants to rent a home for a move-in on the first, I’ll explain that I’m willing to do that but only if they are willing to not complain if the move-in doesn’t go perfect. If they have some slack time in their moving schedule, and they don’t want to have any potential inconveniences related to the move-in, we can always go ahead and set the move-in for the 3rd or the 5th and I’ll promise that I can have everything done by then. In this case, I’m still happy to have the home rented with only a few days vacancy loss.
But if the tenant absolutely must be in on the first, as is often the case with tenants, I’m not going to let a good renter walk away over my fear of logistical snafus. Performing the carpet cleaning, touch-up paint, make-ready maintenance and cleaning after a tenant has moved in is a hassle, no doubt. It can be a nightmare even. But I’d still rather live that short nightmare than allow a home to go vacant while still not rented.
The trick is to set the expectations of both the incoming and departing tenant. If a good relationship has been maintained with the departing tenant, they will more often than not respond favorably when told that we have someone moving in immediately after they are out, and that we’d appreciate any extra time they might be able to provide us. In the case of these two that I did this weekend, one tenant cleared out Thursday and the other by Saturday and both left the homes clean with no damage. Whew! That really, really helps. So these two move-ins went off without a hitch. Imagine if I’d turned these renters away and didn’t have replacement tenants willing to wait until the 3rd or the 5th to move in? I would have done so to avoid expected problems that never materialized. It’s better, as a landlord, to just grit your teeth and go for it, so long as you have properly set the expectations for the inbound tenant such that they will cooperate instead of complain if things get tricky.
Other benefits are that I didn’t have to call the utility companies to switch the electricity, gas and water while the home is between tenants. Nor, therefore, will I have to call to shut off those utilities after a new tenant moves in, nor will I receive utility bills that I have to pay. It’s a straight shot from the old tenant to the new. Also the house doesn’t sit vacant with nobody to care for and water the yard. And did I mention the avoidance of vacancy loss? There is a lot of upside that comes with a quick turnover.
Now, if a home has been occupied for 5 years with the same tenant, and I know after a pre-lease walk-through that it’s going to need new carpet, full paint, cosmetic repairs and a heavy make-ready, I won’t attempt a quick turn. A 5 year occupancy is great, but the home will need freshening up to attract another good tenant. But for most homes in good condition, that are only going to need carpet cleaning and a make-ready clean, it’s well worth the effort to try to have a new tenant move in as soon as possible after the old tenant vacates.