How much does it cost y’all for “turns” between tenants?

[Steven Barr]

Hi BP!

When a tenant moves out of your single family property (say 1500ish square feet) and you have to go fix the property to get it ready for the next tenant…. How much does this typically cost you? What type of repairs are you making?

This is assuming average wear and tear on the property 

[Marcus Auerbach]

We figure it costs us on average $5,000 when a tenant moves out. Our lowest rent is 1,500.

- 1,500: one month rent lost to vacancy

- 1,500: one month rent as cost of re-leasing

- 2,000 for improvements

Total $5,000 (it varies in reality, sometimes we can re-rent the following week, sometimes we spend more on improvements)

Once you understand the cost of a turnover, you start looking at things differently. For example what can I do to reduce turnover rate? Will a dishwasher help? Or dimmable LED lighting in living room and kitchen? What about a 2nd bath room? 

We also finish basements in most of our properties, which costs a lot but does not bring much additional rent, but we have long winters in Milwaukee and that extra space adds significantly to the quality of life. Our average retention is over 6 years.