Why You Need To Account For Vacancy After The 1st Rent Cycle - Even On High End Properties
I don't have a question - Just wanted to provide some education for any newbie buy and hold investors. I am learning the hard way why even nicer properties must account for vacancy after the 1st rental cycle.
My original projections included very little for vacancy since I only purchase high end rentals in nice neighborhoods given that I have a 30 day window to show my property during a tenants final month. I thought this would be more than enough time to rent out a nice place. While it is is most cases ; here are the 2 that have hurt me :
1 - Renting to a tenant that doesn't keep the place as clean as high end potential renters expect it to be for their money. Since the tenant is still renting ; its hard to get the property "rent ready" until your tenant is out. If they live like a sloth and are from out of town with random mattresses on the ground (that is what your prospective renters will see)
2. Allowing leases to come vacant during non peak times. (Non summer months). It may be better in the long run to have a tenant in place for just 12 months where it's easier to re rent right away(Say July to July) then the same tenant renting month to month after the original 12 months ends causing it to possibly open up in the winter where you could be sitting on it for a few months.
I hope someone can learn from my mistakes :