How Long Should Property Manager Have to Make-Ready after Lease End?

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Question: how long do property managers normally allow for cleaning/repairing a property once a tenant leaves?

Our old townhouse in Raleigh was having a difficult time getting rented out.  I had lease-up agent list it 6 weeks before the end of the existing lease, and it was seeing few showings in a pretty hot market.

I didn't notice until a few weeks had gone by that the Available Date was listed as the 19th of the following month, when it was actually vacant on the 1st.  When asked, the agent said it was to allow us sufficient time to paint, make repairs, etc.  In reality, it was going to cost us a month's rent, because the potential clients wanted to move in on the 1st, or at least earlier in the month.

This agent is also the property manager for a few of my parents' rentals, and says that their company policy allows 10 days to do the make-ready on the property.

This seems long to me, and would cost a few extra percentage points of vacancy loss over time.

Are there any best practices for property management in this regard?

Im my limited experience, My units don't go more than 2 months being empty, from the time an old tenant moves out, repairs done, and new tenant in place...but I'm in Southern California. No one cares about your property like you do. I use a Property Management company too, but i've come to understand that I am in the driver seat. I make sure to call them and stay on their *** if I feel they are dragging their feet on something. 

19 days seems a little excessive. If they have their ducks in a row the PM should have the crews storming the place immediately after the tenants vacate. There's no reason why painting and minor repairs can't be completed in 1-3 days.

The key phrase is "hot market".  There's no reason your property should sit vacant as long as it does.  Speaking frank, I believe your property manager is lazy.  

Part of his job, is to do regular inspections.  That way there are no surprises when the current tenant moves out.  Every major repair is already addressed.  This leaves clean up and painting. 3-4 days tops.  Repairs and painting should be done simultaneously (not the same person) if needed.

I have property that I keep a sign with my number out front.  So I get leads even if there are no vacancies.  Many people apartment hunt months in advance.  I let them know if a vacancy comes up, I'll call to see if they've found anything.  Most of the time, these properties aren't vacant more than a week.

Thanks for the responses! @Chuy Gonzalez @Fred Heller

@Jordan Thibodeau

I agree that it should only take a couple of days to get the property ready, especially when it's in good condition.  This one should only need paint touch-ups and carpet cleaning.  We lucked out, and someone we know (with great credit) called and wanted to move in on the 1st of the month.

I think this is a question of marketing - the PM wouldn't want to overpromise, and not be able to have the maintenance person take care of everything before the new lease, and have the new tenants moving in without the property ready to go.

But if the available date is mid-month, it would certainly turn off a lot of prospective renters, as leases almost universally end on the last day of the month.

Fred - as a property manager, how soon do you allow new tenants to move in after a property is vacated (if there are no major repairs)?  For instance, if a lease ends on 6/30, when in July would you tell them to move in? 

Our PM usually has someone moving in within days of the prior tenant moving out, unless there are unexpected time-consuming repairs that are necessitated by the tenant's damage.  I've had leases start as soon as the day after move-out in some cases.

It depends on the repairs.  For a standard move out with no excessive damages, my PM does paint and cleaning in a day.  So tenants are out by noon on the last day and we are ready for move in by 8 am on the first.

It all depends on your expectations as the owner.  In my limited experience, I've seen property managers get 2-3 weeks to do a turnover.  I self-manage my properties and I storm the place and have showings 2-3 days later.

PS-I just bought a new building and the existing caretaker helps with turnovers.  When he saw how we storm the place after move out, he asked "Why are you guys in such a hurry??"

@Stephen Chittenden and @Brie Schmidt  I agree that's how it should be done, and I need to do a better job of setting expectations with my two PMs about turnover timeframes.  Is that a conversation you had with your PMs in the beginning, or was that already their standard practice?  If I could more frequently have under two weeks vacancy for units it would definitely make cash flows exceed my expectations, as I'm normally budgeting for a month and a half vacancy per year.

@Stone Teran That's great how fast you're moving on turnovers.  Do you plan to continue managing your properties long term, or will you end up giving that over to a third party?

Originally posted by @Jordan T. :

@Stephen Chittenden and  I agree that's how it should be done, and I need to do a better job of setting expectations with my two PMs about turnover timeframes.  Is that a conversation you had with your PMs in the beginning, or was that already their standard practice?  If I could more frequently have under two weeks vacancy for units it would definitely make cash flows exceed my expectations, as I'm normally budgeting for a month and a half vacancy per year.

I haven't had to talk to either of our property managers about it.  I think they know that my expectation is for a new tenant to be in as soon as possible.  If they want me to keep paying their fees, then they need to do a good job of getting tenants in.  That's the primary service they provide (unless it goes bad, then they do a lot of work getting a bad tenant out).

Well, my PM manages 48 units for me so every month we are going to have turnover, it is just part of what he does.

I did change our PM agreement which had a positive impact on how things are done.  I decided to bonus him every quarter for every unit that did not have a vacancy.  So if tenants stayed or if he was able to rent a unit back to back and have no loss of rent then he is bonused.  Instead, I don't pay lease up fees.  I felt it was a better incentive

Originally posted by @Jordan T. :

@Stephen Chittenden and @Brie Schmidt  I agree that's how it should be done, and I need to do a better job of setting expectations with my two PMs about turnover timeframes.  Is that a conversation you had with your PMs in the beginning, or was that already their standard practice?  If I could more frequently have under two weeks vacancy for units it would definitely make cash flows exceed my expectations, as I'm normally budgeting for a month and a half vacancy per year.

@Stone Teran That's great how fast you're moving on turnovers.  Do you plan to continue managing your properties long term, or will you end up giving that over to a third party?

 I want to continuing managing my properties long term, although I've had to outsource more and more pieces as I grow.

@Brie Schmidt That's a great idea...so you're basically paying him the same (or more?), but you'll be getting higher occupancy because of it.

I've noticed that I have higher occupancy with the PM of mine that doesn't charge lease-up or renewal fees, however he is reluctant to push for rent increases.  The other PM I use that does charge those leasing fees is very aggressive about raising rents.  On balance I still come out ahead with the higher occupancy.

Maybe an additional incentive would be when the PM raises rents, they can keep the first 2-3 months of incremental rent.

How much work needed to be done? Impossible to answer this question without knowing that.

How well staffed is the property management company you have? It could be possible that there were several of their clients that had vacant units that may have needed to be turned over so that could be a reason for the delay.  Not saying you should be OK with it, but that may be why.

Next time you know that you have a vacancy coming up and want the repair work to be done ASAP try telling them something to the effect of "We want this unit ready to rent by X date, even if you have to hire out the work and it costs more we are OK with that."

This way the PM knows what you are thinking and can schedule accordingly.  I can almost guarantee the issue is with the availability of his crews.

@Jordan T.

 These should be two red flags.  Slow lease up and slow make ready.  What else are they slow about?  Getting back to tenants, taking care of repairs?  I have made the huge mistake, a few times sadly, of not firing a pm quickly or getting them on my time table quickly.  

I suggest you have a sit down meeting with them and lay out your expectations.  If they are unable or unwilling to meet what you are looking for, move on quickly or continue to lose thousands in lost revenue.

Also, I call almost all of my PM's weekly.  I call them Monday and Friday when I have a vacant unit.  I want to know what steps they have taken that week and what else is needed to rent my units.

Never take their marketing for granted.  Check all the listing sites at least weekly to ensure they are marketing your property.

I also do spot checks on the work they have done to make ready the property.  I have fired pm's for failure to make the unit presentable.

If you haven't noticed, I'm the squeaky wheel.  Sadly I've lost a lot of money when i have trusted but not verified.

A 5-year tenant turnover will take a lot longer than a 6-month one, obviously.  Missing that key piece of info as @Michael Noto points out.  Was your tenant there long? Does your PM also have rentals themselves?  Have you posed as a tenant and called them to see how they handle you?  Chances are that's how they are handling others as well.

My last 2 vacancies recently have been 'negative'.  Tenant notice for the end of month, moved on 25th or so.  Rented next day.  That's self-managing MY units.  Obviously a PM who is managing a ton of units for others will have to put you in the cue.  There are many more costs to having a PM than extra vacancy and being charged for the privilege.  $100 breaker flips and small drain clean-outs for example.  Manage your own property if you can.  No one will take better care of your property than you!

I took what I had budgeted for vacancy per unit and give him 25% of that to him as a bonus.  He is paid quarterly and only gets the bonus if all 3 months we collected rent.

As far as increases, I set the price of the units.  I keep an excel of what each unit rents for and what I think each unit rents for (my PM and I discuss this).  If it is a small amount and the tenants are good we don't raise rents but when they do move out we market it at the new rent. 

@Michael Noto  For this particular turnover, little needs to be done...some carpet and paint for a tenant that had been in there a year.  Other times for more repairs like full paint, new carpet and a few other repairs, it's been a couple of weeks.  This PM company is fairly well staffed, but you're right that I'm put in the queue for maintenance crews.  They manage 700 units, and we account for 5 of them.  Their systems and owner facing side are quite good, but I will definitely try your workaround to get a faster make-ready.  Why hasn't that ever occurred to me before?

@Jason Miller  You're right that poor performance in those areas is quick grounds for termination.  I fired the previous PM for just that.  No, this PM is very good at interfacing with tenants and customer service for both tenants and me as the owner.  And the reporting is good.  My issue with this one is in turning over units.  I need to set clearer expectations as to what I need from them, which will likely be that I want units to be ready by the 5th of each month unless there are extensive repairs required, and that they need to hire outside help if their own crews are booked.

@Steve Vaughan That's awesome how quickly you re-rented your properties.  And you'll definitely cash flow better if you spend the time to manage your own properties, especially if you manage as effectively as you're doing.  From the start I planned my purchases to use 3rd party management...I want to make myself as redundant as possible, especially now as I live a couple of hours away from the properties, and I also want the best possible return on my time.  As for your questions, this tenant had been in the property for a year, and the necessary repairs were much to small for them to take this long...I'll make sure that this particular issue doesn't happen again, or I'll be changing companies.  The PM doesn't own properties...that's one of the items I screened for when I interviewed them.  I've never called and posed as a tenant, but that's something I'll try.  I actually know the new tenant, so I'll get some feedback from them on their thoughts.

@Brie Schmidt  Thanks for the tip, I think that's a wonderful idea.

Got it @Jordan T. Thanks for the thorough response.  Living 2 hours away changes things for sure.  I wouldn't be interested in self-managing from that distance, either.

I think a lot of owners are frustrated with slow turn around times.  You'd think earning a new placement fee would be enough to speed things up. Even Brandon Turner had his PM on probation (shared on a podcast) from a 3 weeks - no turnover work done issue.  Hopefully in the  future these guys will be responsive to ya!

@Jordan T. It normally takes me 2-3 days to turn over a home, as long as I can get all the trades in there.  Scheduling can be hard sometimes, depending on the time of the month and how much notice I have to give them.  I have the handyman/painter in the first/second day, and then the cleaners and carpet cleaners in the second and third.  If I have a week, I consider that to be a leisurely way to get my work done.  :)  19 days is definitely excessive.

@Dawn Brenengen Thanks for the confirmation - that's good to hear from a PM.  It sounds like you're definitely managing properties the right way.  Have you ever had the trades delay your turnover for more than a day or two?

@Jordan T. I have had some scheduling issues where I needed an extra day to accommodate the handyman or cleaners, but i work with enough contractors that if someone isn't available for a week, I'll just keep dialing until I find someone who is available.  Sometimes it costs a little more to have to hire the more expensive person, but if that's the only person available, then so be it.  However, I usually know that someone is moving out 30 days or more in advance, so if I schedule everyone when I get notice, then they are not booked yet.  Hardly ever an issue.