Memphis Turnkey Tenant Turnover Costs

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Memphis Turnkey Tenant Turnover Costs

Daniel Z Fang
Rental Property Investor · San Diego · Member since 2019 · 73 posts · 34 votes

Hello bp community,

After closing on a SFH turnkey property with a well-known provider in Memphis, my tenants stayed for a full 2 years. I collected about $300 / month in cashflow with relatively few repairs/maintenance issues. At the end of the 2 years, they are now moving out with plans to purchase a property of their own. During turnover, the turnkey provider quoted me a repair cost of $3100, including a 15% markup. There were pictures included and everything looked to be cosmetic. To offset the $3100, we were able to collect about $700 from the security deposit. That leaves me with a bill of $2400 which is 33% of my cash flow for the past 2 years. Obviously this doesn't include principal paydown or appreciation. Is this a fairly common scenario? Turnover cost breakdown below. Some of the prices seem ridiculous (e.g. $100 to program two garage doors? That's a $20s from Amazon).

I started with turnkey to get into REI, but now with a little more experience under my belt, I'm considering selling my turnkeys at a loss and moving on to something with more meat on the bones.

Exterior - $225
- pressure wash
- remove damaged/torn window screens
- remove all stickers from all windows
- repair hole in soffit to the right of chimney
Main Interior - $825
- repair/replace damaged sheetrock
- wipe down and clean all walls throughout house
- wipe down and clean all doors, trim and baseboards and throughout house
- touch up paint on walls
- touch up paint on trim and doors
- replace missing/broken blinds
- replace missing/broken doorknobs
- replace missing/broken light switch and outlet covers
- replace missing/broken light bulbs
- make sure all doors open/shut properly
- make sure all windows open/close properly
- replace air filter
- replace batteries in the smoke detectors
- remove all trash from attic
- clean and paint all bars and shelves in closets
- clean all AC vents and return vents
- make sure all drawers and cabinets open and close properly
- make sure to clean out all drawers and cabinets
Living Room - $10
- clean and paint fireplace with black high heat paint
Kitchen - $55
- wipe down and clean all cabinets, inside and out
- touch up paint on cabinets
- paint under sink
- tighten loose cabinet hardware
- caulk sink, floor, counter
- replace broken trim on ends of countertops
Laundry Room - $10
- clean and paint inside washer box
- clean out dryer vent
Half Bathroom - $25
- wipe down and clean all cabinets, inside and out
- touch up paint on cabinets
- paint under sink
- tighten loose cabinet hardware
- caulk toilet, sink, tub, floor
- tighten door handle
Master Bathroom - $75
- paint cabinets inside and out
- tighten loose cabinet hardware
- caulk toilet, sink, tub, floor
- fill in missing grout in shower
Hall Bathroom - $35
- wipe down and clean all cabinets, inside and out
- touch up paint on cabinets
- paint under sink
- tighten loose cabinet hardware
- caulk toilet, sink, tub, floor
Stairs - $20
- paint handrail
- paint banaster
Garage - $25
- pressure wash garage floor
Locks - $300
Yard - $175
- cut, edge, weedeat
- trim bushes
- trim up trees
- clean up fencelines
- haul off all trash
- Remove grass from cracks in concrete
- remove all loose limbs and debris
- clean out flower beds
Flooring - $275
- clean all carpets
Carpet Cleaning Estimate: $275
Garage - $100
Program two new garage door remotes
Pest Control - $85
- pest control needed: General pest spray
Trash - $350
- remove trash at the curb
Cleaning - $120

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Will FraserPro Member
Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
6y

Hi @Daniel Z Fang, my initial judgement was that "something must be bloated in these numbers" but having run through the list of charges the only thing that seems askew is the $300 lock charge. However, that may be because of the procedures they use in lock changes and rekeying.

That said, I think this provider is giving good rates for this work and I'm actually surprised to see so detailed of a breakdown.  They basically sent you a SOW as an estimate, which is above and beyond what most would do.  Thanks to that, though, I was able to compare that with local rates and I'd say you're on par with the lowest reasonable rates you could expect a business to charge and still be in business.

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  • Will FraserPro Member
    Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
    6y

    Hi @Daniel Z Fang, my initial judgement was that "something must be bloated in these numbers" but having run through the list of charges the only thing that seems askew is the $300 lock charge. However, that may be because of the procedures they use in lock changes and rekeying.

    That said, I think this provider is giving good rates for this work and I'm actually surprised to see so detailed of a breakdown.  They basically sent you a SOW as an estimate, which is above and beyond what most would do.  Thanks to that, though, I was able to compare that with local rates and I'd say you're on par with the lowest reasonable rates you could expect a business to charge and still be in business.

    3Reply
  • Daniel Z Fang
    OP
    Rental Property Investor · San Diego · Member since 2019 · 73 posts · 34 votes
    6y

    @Will Fraser Thank you, I appreciate the insight

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Will Fraser:

    Hi @Daniel Z Fang, my initial judgement was that "something must be bloated in these numbers" but having run through the list of charges the only thing that seems askew is the $300 lock charge. However, that may be because of the procedures they use in lock changes and rekeying.

    That said, I think this provider is giving good rates for this work and I'm actually surprised to see so detailed of a breakdown.  They basically sent you a SOW as an estimate, which is above and beyond what most would do.  Thanks to that, though, I was able to compare that with local rates and I'd say you're on par with the lowest reasonable rates you could expect a business to charge and still be in business.

    I think what happens is that folks think of how they personally live.. and not how the tenant base where they chose to invest lives.

    this is just very typical of a mid western property that has been a rental for a few years.. I mean in your personal home are you missing door knobs and broke all your blinds and have holes in your sheet rock and since one buys a fresh rehab house 2 years ago.. in the home you live in do you need to paint it and clean it like this in two short years..   ???

    Not all tenants are that hard on houses.. but most with small kids are and this is just what happens being a landlord with resi property.. And I suspect when you buy these there was probably 500 to 800 bucks a year to be set aside for turn over.. so you may have a little more damage than what you should have expected..  But to expect these homes to be broom clean.. Like you would leave a home you lived in personally is simply not reality. 

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    2Reply
  • Daniel Z Fang
    OP
    Rental Property Investor · San Diego · Member since 2019 · 73 posts · 34 votes
    6y

    @Jay Hinrichs Thank you. Very good points

    0Reply
  • Caroline C.
    Investor · Jacksonville Beach, FL | NYC | Tamarindo Costa Rica · Member since 2014 · 182 posts · 130 votes
    6y

    @Daniel Z Fang Honestly, the pricetag is pretty typical for these kinds of turnovers, but to me the scope seems like a copy/paste. How many missing/broken blinds are there. How many missing doorknobs are there. Paint should have a general quote amount and a scope to it and then those items can come out of the list. Same for cleaning - should be an amount for deep clean house and all the little 'clean' items can be removed. How many windows don't open/shut property - they should know that already and cost should be based on how many and the nature of the repair. The estimate seems very detailed, but to me it also seems very lazy.

    2Reply
  • Daniel Z Fang
    OP
    Rental Property Investor · San Diego · Member since 2019 · 73 posts · 34 votes
    6y

    @Caroline C. Thank you

    0Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    6y

    Those expenses seem quite average for any average priced rentals turnovers. Sometimes you get lucky and just need cleaning / touch up. I would be reasonably ok at 3k vs the more serious 10k+ thrashing that is also always possible. Understanding if you were doing this yourself with one labor guy, it might be $1k tops. Either way rentals are always a bit of a crap shoot, I have seen 10X worse in much higher rental classes. Good luck !

    0Reply
  • Jim Cummings
    Residential Real Estate Broker · College Station, TX · Member since 2013 · 1k+ posts · 969 votes
    6y

    @Daniel Z Fang. Balance these costs against the amount of education / knowledge you received by investing in the Turnkey Property.

    Ask yourself, with the same baseline of knowledge you had before the Turnkey Investment - would you do it again? Would you recommend a Novice first time investor to go with the Turnkey Company?

    1Reply
  • Daniel Z Fang
    OP
    Rental Property Investor · San Diego · Member since 2019 · 73 posts · 34 votes
    6y

    @Jim Cummings It's an impossible question. As an analogy, sometimes people ask me whether I would go through medical training again if I knew then what I know now. I am a different person now than I was then and the current me has the privilege of knowing what I know now only because I went through the training. The obstacle is the way. There's no one path to getting education in REI but I wouldn't know what I know now if it weren't for owning Turnkeys so for that I'm grateful. There's only one path and it's forward.

    3Reply
  • Jim Cummings
    Residential Real Estate Broker · College Station, TX · Member since 2013 · 1k+ posts · 969 votes
    6y

    @Daniel Z Fang. Amen to that! We either move forward or atrophy!

    2Reply
  • Mike MoseePro Member
    Investor · Eagle Point, OR · Member since 2011 · 181 posts · 117 votes
    6y

    WE have SFRs in Memphis too and  depending on square footage costs seem in line

    1Reply
  • Daniel Z Fang
    OP
    Rental Property Investor · San Diego · Member since 2019 · 73 posts · 34 votes
    6y

    @Mike Mosee it’s a 4/2 2209 sq ft. Sounds about right?

    0Reply
  • Mike MoseePro Member
    Investor · Eagle Point, OR · Member since 2011 · 181 posts · 117 votes
    6y

    Quote is very reasonable considering square footage

    1Reply
  • Daniel Z Fang
    OP
    Rental Property Investor · San Diego · Member since 2019 · 73 posts · 34 votes
    6y

    @Mike Mosee thank you

    0Reply
  • David Hutson
    Rental Property Investor · Bartlett, TN · Member since 2013 · 404 posts · 421 votes
    6y

    I'm here in Memphis with many rentals.  Unfortunately the numbers look pretty similar to what I see for myself and a lot of investors, maybe a little higher, depending on the size of the home.  The locks are what are always expensive and what I consider high.  It's usually due to the storm door locks.  They have what are called "Marks" locks on the doors and it's expensive to replace or rekey.  I have a quote today to replace one set at $250.  I'm ready to change out the storm doors to security doors between tenants since they use standard door knobs and I can replace the door and locks for less than $250 for just the lock.

    1Reply
  • Daniel Z Fang
    OP
    Rental Property Investor · San Diego · Member since 2019 · 73 posts · 34 votes
    6y

    @David Hutson thank you

    0Reply
  • Allison Park
    Member since 2024 · 158 posts · 87 votes
    10mo

    Thanks for sharing your experience.  I just purchased some new construction town homes and have them filled but expect renters to only stay 1-2 years.  I have reduced some of the costs in my lease terms.  Renters are responsible for batteries, light bulbs, and filters and paint touch ups.  Seems like they should have taken more out of the security deposit IMO.  Broken blinds and door knobs I would definitely take out of the security deposit.  Basically in my lease terms the renters are responsible for returning in the same condition minus normal wear and tear.  Hoping to have less of a turnover cost.  Wish me luck.  This will help me fine tune my list of renter responsibles :)

    0Reply
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