Tenant Turnover Q's: timeframe and cost expectations

[Dean Valadez]

Hello,

I have been hearing on BP podcasts that tenant turnovers can equal about $6000-8000 (one host even said up to $10k, if I recall correctly) when lost rent and repair/upgrade costs are factored together. That seems quite high and I wanted to see what some of you experience. I searched for turnover answers but some of the posts were either old, or did not have exactly what I was looking for. I am fortunate to not have had tenant turnover yet and I PM my own four-plex and single family rental. I am simply pre-planning should I have a tenant move out in the future after their lease expires and they don't want to renew. I realize there are a lot of variables at play during turnovers, such as:

- What was the condition prior to tenant move-in and what is the condition after move-out?

- What property class is the rental (A, B, C, D)?  that could determine the quality level the unit needs to be at for a new tenant

- Am I doing the work myself, or hiring out?

- Is there a lot of updating that needs to be done to the unit?

- How long the unit sits vacant for repairs/cleaning, and finding a tenant

- City/town/state the unit is in

Please respond with your thoughts, hopefully with the bullet points above as points of reference and stated as such in your reply (I know, I am asking for a lot from you all :) ) But, for example, a Class D property in Milwaukee, WI probably requires less turnover time, lower quality materials, not as precise of a paint job, etc, than perhaps a Class A property in San Francisco, which would require higher quality materials, higher labor costs, longer vacancy since more precise craftsmanship would be required, etc. Thus, if the owner of their Milw, Class D property replied without noting the above, he/she might say it only costs $1000, whereas the owner of the SF Class A property might say, $10k, but if I didn't know their location, property class type, if they used contractors, or did the work themselves, etc., then I would still have too wide of responses to be able to anticipate what the real costs might be for my particular situation, property, etc.

For reference, my properties are in Class B areas of Milwaukee. I acquired the four-plex with varied levels of updates, but would need/want to paint cabinets, paint doors, trim, walls; if carpeted, replace carpet with LVP; replace faucets with modern faucets, etc. Some work I can do myself, but for time purposes, would hire out. Units are in good shape otherwise, besides those cosmetic/outdated issues.

Thanks for any input you all can provide!

[Dan H.]

My turnover is ~$500 per year of rental.   It may fall off a little for 3+ years. 

I have a unit turning over start mid this month.  Tenant was there 14 years.   I expect turn over will be in excess of $5k.  I will paint all, replace rugs (rugs are only in BR), replace any shutoffs that show any signs of wear, at least one shower cartridge needs change, change all blinds.  Tub/shower enclosures may need deglaze (2 bathtub/shower enclosures). I will also change all 4 BR windows (common windows have already been changed) and a wall heater (not operational) but consider these cap ex and not included in the $5k.  I will also likely change to decora outlets/switches and not include this cost in the tenant turnover (again cap ex/ upgrade).  

Note if tenant had been there a few years, the walls get spot paint feathered to match.  Carpets should last at least 5 years and I clean them even if they look clean. 

Turnover costs are functions of many things including length of tenancy, quality of tenant, occupancy level, existing finishes (carpet has shortest lifespan but is cheap), etc.

I hope unit is ready to show by Nov 1.  Normally we do not have vacancies in late fall through mid spring and fill our vacancy in first open house.  I expect this one to be a bit more challenging.  I will be surprised if we have tenant by Dec 1 and fairly happy if by Jan 1.  

Good luck