If tenant is not re-signing lease, when do you start showing?

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If tenant is not re-signing lease, when do you start showing?

Kenton C.
New York City, NY · Member since 2014 · 31 posts · 2 votes

Hi All,

My first tenant in my first ever rental is nearing the end of their 1st year lease. I currently have a PM in place, and their procedures are to ask the tenant 30 days prior to end of lease if they would like to stay for another year. If the tenant is not staying, the PM will wait till tenant moves out, then will make the unit rent ready, THEN start marketing the property. All in all will probably lead to 1 month vacancy (a few days to make unit rent ready, and 3 weeks to market and get new tenant).

I believe this timeline is unacceptable, and that the PM should be asking the tenant 90 days prior to lease end, and if the tenant is not re-signing, the PM should begin marketing and showing the unit right away so that there will be a new tenant lined up, ready to move in right after the unit is made rent ready. 

Landlords, what are your timelines when asking a tenant whether they're staying, and do you show the unit while the tenant is still in the property? Does this become a problem since the tenant still lives there? I'd like to cut down on vacancy as much as possible, and not sure if its standard practice to show the unit when the first tenant is still there. 

Thanks all.

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Mike Wood
Developer · New Orleans, LA · Member since 2015 · 1k+ posts · 898 votes
10y

@Kenton C. Absolutely do not try and show an occupied unit.  You and your PM have no control over how the unit shows, as the current tenant could have it overstuffed with furniture, not so clean, etc.

I have tried this and never was it successful.  I lost good quality tenants because the unit was not show ready.

If you are certain of your turnover time, you could start marketing it around the time your current tenant are leaving, setting up any showings for after the unit turnover.

As for you timing issue, I also disagree.  Most tenants don't think about moving until right before their lease is up.  Asking them to give 90 days notice is likely a waste of time, and could be a violation of housing law in your area.

Vacancy is a cost of doing business, hopefully the screening process will find long tern tenants.

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  • Mike Wood
    Developer · New Orleans, LA · Member since 2015 · 1k+ posts · 898 votes
    10y

    @Kenton C. Absolutely do not try and show an occupied unit.  You and your PM have no control over how the unit shows, as the current tenant could have it overstuffed with furniture, not so clean, etc.

    I have tried this and never was it successful.  I lost good quality tenants because the unit was not show ready.

    If you are certain of your turnover time, you could start marketing it around the time your current tenant are leaving, setting up any showings for after the unit turnover.

    As for you timing issue, I also disagree.  Most tenants don't think about moving until right before their lease is up.  Asking them to give 90 days notice is likely a waste of time, and could be a violation of housing law in your area.

    Vacancy is a cost of doing business, hopefully the screening process will find long tern tenants.

    2Reply
  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    10y

    IF your tenants are clean and the unit is presentable, there is no reason not to start advertising and showing about a month before the turnover.

    But that is a big if. If you aren't sure about it, better to wait for the unit to be clean and empty.

    1Reply
  • Lynn McGeein
    Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    10y

    We did ask for a 60-day notice with our PM when we signed with them as we want to know well in advance if we will have to turn over, so they contact us 90 days out with their proposed renewal rates for 1- and 2-year renewal options and new advertised rate if tenant doesn't stay, then send notice to tenant once we confirm.

    I will say that when the tenant moves, the turnover timeline is usually fast as long as the last tenant left the place in decent shape.  Even though we do not show until they move out, our PM has them rented out again in as little as 7 days from move-out, and unless it was totally trashed by the last tenant, 14-21 days is normal.  Over 30 days is rare.  

    0Reply
  • Jacqueline Carrington
    Investor · Corona, CA · Member since 2014 · 746 posts · 372 votes
    10y

    What does your lease say? When I managed a 100 unit building, the lease stated we could show with at least 24 hours notice when a notice to vacate had been given. 

    I always had photos of the unit when it was empty and ready when marketing, so if I got an interested prospective and marketed for future occupancy, they knew the unit would be occupied at showing. I pre-leased lots of units doing this and all we had to do is turn the unit for the new resident.

    1Reply
  • Kenton C.
    OP
    New York City, NY · Member since 2014 · 31 posts · 2 votes
    10y

    Thank you everyone for the discussion! Good points being raised on uncontrollable factors such as cleanliness of the unit during showing which might affect the success rates of the showing. I think I will have the PM advertise 2 weeks prior to tenant lease ends, and schedule all showings for after the tenant vacates (if unit is in good shape), or for when the unit is made rent ready (if unit is not in good shape). Hopefully the 2 week head start on marketing will cut down on vacancy a little bit.

    @Jacqueline Carrington Very good point on having quality pictures of the unit in rent ready condition. DId you find that with these pictures, tenants still wanted to see the unit in person, but were more comfortable with the unit being in a less than stellar shape since they saw through the pictures what it would look like prior to their move in?

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  • Jacqueline Carrington
    Investor · Corona, CA · Member since 2014 · 746 posts · 372 votes
    10y

    @Kenton C. yes, the rent ready photos definitely helped because it showed ultimately what the unit would look like when they moved in regardless of what it looked like with the current occupant there.

    I always told the prospective that the unit is occupied and since they have already seen rent ready photos, there are less questions about what would be changed/updated or is this/that going to be done. It was more so just to get a feel for the layout in person and seeing if their furniture would fit.

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  • Roy N.Pro Member
    Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
    10y

    @Kenton C.

    Here, on an annual lease, the tenant must give 3-months notice if they are not going to renew and the law permits the landlord to show the property during the last month of tenancy with 24-hrs notice.   

    In the case of our student rentals, we often have them relet before they become empty.  Since the last month of the lease frequently aligns with end-of-term examinations, when a tenant gives notice, we will start advertising immediately and will make arrangements with the tenant for blocks of time in which we will show the unit prior to the examination period.

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Kenton C.:

    Hi All,

    My first tenant in my first ever rental is nearing the end of their 1st year lease. I currently have a PM in place, and their procedures are to ask the tenant 30 days prior to end of lease if they would like to stay for another year. If the tenant is not staying, the PM will wait till tenant moves out, then will make the unit rent ready, THEN start marketing the property. All in all will probably lead to 1 month vacancy (a few days to make unit rent ready, and 3 weeks to market and get new tenant).

    I believe this timeline is unacceptable, and that the PM should be asking the tenant 90 days prior to lease end, and if the tenant is not re-signing, the PM should begin marketing and showing the unit right away so that there will be a new tenant lined up, ready to move in right after the unit is made rent ready. 

    Landlords, what are your timelines when asking a tenant whether they're staying, and do you show the unit while the tenant is still in the property? Does this become a problem since the tenant still lives there? I'd like to cut down on vacancy as much as possible, and not sure if its standard practice to show the unit when the first tenant is still there. 

    Thanks all.

    What does your lease say regarding notice to renew or not renew?  You can't just decide what is and isn't acceptable or require 90 day notice after you signed a binding lease.  If you have a lease that's says 30 day notice, it's already in writing what the timeline is.

    30 days is about right, sometimes 15 days, for vacancy when turning over a unit.  Your lease should already have right to enter terms (24 hour notice, etc.), so technically you can show the unit while the tenant is there. However, it's the rare occupied unit that shows well.  It's the rare worthwhile applicant that will be attracted to a unit that shows poorly. Lots of PMs do not want to show the unit occupied. Ask your PM how often they are able to show occupied units and if they are even willing.

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  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    10y

    Showing an occupied unit does not work well for multiple reasons.

    1. They do not show well.

    2. It causes problems with the current tenants.

    3. You do not know the condition the unit will be left in when the current tenant moves out.

    4. What if the current tenant does not move out? What do you do with the new tenant who has already paid a deposit and given notice to their landlord in the event there is a major delay.

    1Reply
  • Kenton C.
    OP
    New York City, NY · Member since 2014 · 31 posts · 2 votes
    10y

    @James Wise Thanks for the response! All very good points I did not previously think about. I think that I've now learned to wait till the unit is empty to show.

    1Reply
  • Kenton C.
    OP
    New York City, NY · Member since 2014 · 31 posts · 2 votes
    10y

    @Account Closed Thank you very much for the response as well! The lease says 30 days, but the PM said that their practice is to show an unoccupied unit, which now after reading all the responses, I think is the way to go. I wanted to decrease vacancy as much as possible, but it seems like that turnover period is just part of the game. Thanks!

    0Reply
  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    10y
    I've had success in the past by offering the vacating tenant a monetary bonus if they help me find a new tenant before they move out. Some have stepped up to the point of conducting their own showing. In these cases I was fortunate to have great relationships with the tenants who were leaving. None of this works if they are leaving on bad terms. James Wise makes very good points, but worst case scenario is you have to return the deposits paid by the new tenants of the unit is not rentable on time.
    1Reply
  • Matt Motil
    Rental Property Investor · Cleveland, OH · Member since 2015 · 1k+ posts · 880 votes
    10y

    I tried showing occupied units before, even in my "A" properties, and it just doesn't work well. @James Wise hit the nail on the head for all the reasons I have experienced as well. While it stinks to think about your property sitting vacant for a bit while you find a new tenant, you should account for this in your budget and you will be much happier in the long run. Better to wait and get prospective tenants in there when you are thrilled with how the place will show. Too many times I've had great prospective tenants leave feedback saying they love the place and location but couldn't get past the mess the current tenets had everywhere. Ugh! 

    0Reply
  • Daren H.
    Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
    10y

    I have a property my PM is currently showing while occupied. It could be an okay thing to do or it could be a bad thing to do largely depending on your tenant. My lease gives me the right to show 60 days out. The tenant has indicated they are not renewing (her new construction house will be completed). This particular property is an A property and the tenant is neat, clean and cooperative. There is also very strong demand. The tenant is nice enough to work with us to have the property cleaned and ready for move-in a week before month end.  I think if you did a "bang-up" job with managing the property for the current tenant and the tenant maintains a nice, clean place and is cooperative, you can pull off showing while occupied. This has worked for me a couple of times but only on this property. 

    0Reply
  • Lucas Hall
    Rental Property Investor · Arvada, CO · Member since 2011 · 146 posts · 103 votes
    10y

    The #1 killer of revenue/profits is vacancy.  You 'could' wait until the tenant moves out, because starting the turnover process, but you're voluntarily giving up 1-2 months worth of rent. And if you're paying a property manager on top of that, you can kiss 1/4 of your potential revenue goodbye.

    By performing regular inspections (once every 3-6 months), you'll know the condition of the property and can make repairs throughout the lease term.  There's no reason why you have to wait for a tenant to move out in order to repair a hole in the wall.  A good property manager will stay on top of repairs to help create a quick turnover. 

    I require 60 day notice of non-renewal, and then start marketing the property immediately. I perform many repairs at that time, and only save the deep cleaning for when they move out.  By utilizing "move out/in times" of 10am and 2pm in the lease, you can have 28 hours of vacancy without missing a single day of rental income. 

    I've been using this process for 10 years on 5 properties, and with hundreds of tenants, and I've only ever had 1 vacancy on 1 unit, for 1 months.  Every other time, it was a flawless move-out/ move-in the very next day.  By my calculations, it's earned me 20-25% more than those who decide to wait until it's most convenient to handle a turnover. 

    2Reply
  • Roy N.Pro Member
    Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
    10y

    @James Wise

    While I agree those conditions frequently arise, it need not be the case.   As mentioned above, we often show a student unit 3-months (or more) before it becomes vacant.  If it has been some time since our last inspection (i.e. >2-3 months), we walk schedule an inspection of the unit and note all items that need be repaired.   We address any urgent items and note those which require vacancy to complete.   When then arrange a block or two of time (say Wednesday evening and Saturday afternoon) with the existing tenants.  If the tenant's housekeeping is lax (not uncommon with students) we will offer our cleaning service a couple of days prior to the showings.

    When showing the unit, we advise any candidates of the items we have identified to address and explicitly point out those which will not be addressed until after the present tenants move out.    With student rentals we are fortunate that the outgoing tenants are frequently "gone" a week or two before the end of their lease.

    In some situations, it is not possible to complete work during the turn-around window.  Fortunately, with students rentals, the incoming tenants may not "move-in" full time until a month or two after the start of their lease.  In these situations, we can usually make arrangements with the incoming tenant to affect the repairs after move-in, but before full occupancy.  (We offer the new tenants a per-diem rebait for every day we are in the unit and it is not usable by them ... ie. we are replacing flooring.  We will also provide incoming tenants with temporary storage facilities for their furniture while we finish work)

    0Reply
  • Stephen E.
    St Thomas, Ontario · Member since 2013 · 575 posts · 408 votes
    10y

    Like @Roy N. I have shown occupied units with success. As a result I have hardly ever had a vacancy when transitioning from one tenant to another. I have found that most tenants are reasonable about things once you explain your practices to them. Here tenants must give sixty days notice from the next whole rental period (e.g.,  if they decided to leave today on the 14th their notice would be effective January 1 and they would leave at the end of February). Showings are allowed throughout this period and while I almost always give 24 hours notice in fact the law requires only reasonable notice, and in the extreme case of a prospect coming in from Toronto to look at a whole bunch of units on one day, reasonable could be a matter of a few hours. This would be rare, but it is permissible under the law and I explain it to the tenants at the outset. I stress that I would keep such things to a an absolute minimum.

    Of course it helps to have cultivated good relations with your tenants throughout their tenancy. I am just finishing up my Christmas rounds, with small gifts (Costco gift baskets or movie tickets this year, depending on the age of the tenant); it give an opportunity to build and maintain links. I am also very careful to consistently take care of needed maintenance quickly so as to be responsive to their concerns. Do this and they know you and know that you are reasonable. This comes back in a variety of ways, but end of term showings is one of the most useful.

    I focus showings in two time periods (Weds 6-8 pm and Saturday 1-3 pm). I always email as far in advance as is possible and advise the tenants whether there are showings at that time. I text the tenant as soon as showings are over so they know that the unit is clear, thus minimizing inconvenience. I have found if you do these things tenants are cooperative. They keep the place in good condition for showings, and they understand the issues. It helps that once in a while I leave something like a bottle of wine behind to thank them for their help. Part of this is good screening and only letting in tenants who seem reasonable. Part of it is explaining things far ahead and getting their cooperation. Part of it may be the culture in Ontario. Whatever it is, it has worked for me. I hate the idea of not trying to rent earlier and deliberately going with a vacancy for at least a month. Of course your mileage may vary. What class of units do you have and what class of tenants? These are important variables.

    1Reply
  • Keith Lewis
    Interior Decorator · Canton, MI · Member since 2015 · 129 posts · 100 votes
    10y

    Have to agree with the consensus. Wait til they're gone. I know I might cost you a month or two but you were going to need it anyway to freshen up the unit. If it's in the budget hire a cleaning service(contract with them for future services and get a discount). There are also property maintenance companies that can do repairs as well(contract them too). Work the cost into the lease AND security deposit to spread the cost and not price yourself out of the market OR realize that it's part of the cost of doing business and split it with the new tenants.

    0Reply
  • Steven Gesis
    Investor · Miami, FL · Member since 2015 · 1k+ posts · 390 votes
    10y
    Originally posted by @Kenton C.:

    Hi All,

    My first tenant in my first ever rental is nearing the end of their 1st year lease. I currently have a PM in place, and their procedures are to ask the tenant 30 days prior to end of lease if they would like to stay for another year. If the tenant is not staying, the PM will wait till tenant moves out, then will make the unit rent ready, THEN start marketing the property. All in all will probably lead to 1 month vacancy (a few days to make unit rent ready, and 3 weeks to market and get new tenant).

    I believe this timeline is unacceptable, and that the PM should be asking the tenant 90 days prior to lease end, and if the tenant is not re-signing, the PM should begin marketing and showing the unit right away so that there will be a new tenant lined up, ready to move in right after the unit is made rent ready. 

    Landlords, what are your timelines when asking a tenant whether they're staying, and do you show the unit while the tenant is still in the property? Does this become a problem since the tenant still lives there? I'd like to cut down on vacancy as much as possible, and not sure if its standard practice to show the unit when the first tenant is still there. 

    Thanks all.

     Hi Kenton!

    You make an excellent point! You don't want to have your property sitting vacant if you know someone out there might want to be looking at it. 90 days prior to move out is a perfect time to begin asking what are the tenant's plans for the coming year. If they are not interested you should make plans for showing the house and marketing it (always with the tenant's consent if they are still living there.)

    You should make sure to clearly state in your lease that you do reserve the right to show them home while they are still living there. You must give them 24 hour notice if you are going to show it. Although it is pretty difficult to show a home with someone living in it. It might be best to begin listing it online 30 or 45 days prior to move out.

    If you have any questions, please feel free to ask!

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Lucas Hall:

    The #1 killer of revenue/profits is vacancy.  You 'could' wait until the tenant moves out, because starting the turnover process, but you're voluntarily giving up 1-2 months worth of rent. And if you're paying a property manager on top of that, you can kiss 1/4 of your potential revenue goodbye.

    By performing regular inspections (once every 3-6 months), you'll know the condition of the property and can make repairs throughout the lease term.  There's no reason why you have to wait for a tenant to move out in order to repair a hole in the wall.  A good property manager will stay on top of repairs to help create a quick turnover. 

    I require 60 day notice of non-renewal, and then start marketing the property immediately. I perform many repairs at that time, and only save the deep cleaning for when they move out.  By utilizing "move out/in times" of 10am and 2pm in the lease, you can have 28 hours of vacancy without missing a single day of rental income. 

    I've been using this process for 10 years on 5 properties, and with hundreds of tenants, and I've only ever had 1 vacancy on 1 unit, for 1 months.  Every other time, it was a flawless move-out/ move-in the very next day.  By my calculations, it's earned me 20-25% more than those who decide to wait until it's most convenient to handle a turnover. 

    When do you paint and re-carpet?  Is that also done while tenants are still in place?  Or during the 28 hours of vacancy?

    0Reply
  • Lucas Hall
    Rental Property Investor · Arvada, CO · Member since 2011 · 146 posts · 103 votes
    10y

    Hi 

    @Account Closed

    With annual carpet cleanings, the carpet only needs to be replaced ever 5 years or so. Same for the painting - a magic erasure works wonders to clean up scuffs. 

    Carpet and paint dont happen every year, and you can paint only the rooms that really need it.  

    You can accomplish a lot in 28 hours if you line up contractors ahead of time. 

    The real key is to have your finger on the pulse of the property so that you're not surprised with the condition when they move out. 

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Lucas Hall:

    Hi 

    @Account Closed

    With annual carpet cleanings, the carpet only needs to be replaced ever 5 years or so. Same for the painting - a magic erasure works wonders to clean up scuffs. 

    Carpet and paint dont happen every year, and you can paint only the rooms that really need it.  

    You can accomplish a lot in 28 hours if you line up contractors ahead of time. 

    The real key is to have your finger on the pulse of the property so that you're not surprised with the condition when they move out. 

    Thanks for your reply.  I'm pretty knowledgable on carpet and paint life.  I'm a cleaning and stain removal master and my arsenal does include magic erasers.  That being said, my question still stands:  when does any necessary repainting or recarpeting occur? Indeed, a lot can be done in 28 hours.  But not always when your contractors are busy.  Not always when it's a holiday. 

    You made a pretty amazing claim: that you've had only one vacancy/loss of rent with hundreds of tenants.  I'm all ears how it's done.

    0Reply
  • Lucas Hall
    Rental Property Investor · Arvada, CO · Member since 2011 · 146 posts · 103 votes
    10y

    Hi Kristine, 

    It's funny you should ask.  I just gave a webinar on exactly how I accomplish this. Here's the recording: https://www.youtube.com/watch?v=nHZHhsvDdy4

    To directly answer your question, it all occurs within the 28 hours between tenants (95% of the time :)

    To your point, contractors aren't always available. But I've been able to build a decent "little black book" of contractors so that I have multiple (reliable) options. Sometimes I'll go 4 or 5 contractors down the list until I can find one that fits into the schedule. I'm also fairly handy, and can do a lot of repairs myself (if it came to that). 

    The trick with carpet is to order it early, and get on the installer's schedule. Have them come measure weeks or months in advance. Give proper notice to the current tenants. They usually don't care because they've mentally checked out anyway. But even if there is a last minute delay for the install, I am honest with the tenants moving in, and either offer to credit back a day or two, or just tell them not to put their stuff on the area to be carpeted for a day if the have to move in immediately.  It's not pretty, but it works if it has too. They usually don't mind a day of disorder (after all they are moving), especially when I tell them that they are getting NEW carpet. 

    Other times, outgoing tenants will leave multiple days early, allow additional time for repairs. They are usually fine with doing massive repairs after they move out but while still paying on a few days of rent because they want to look favorable while I process their security deposit.  Obviously, they still have access if they want it. Open communication makes for some great turnover opportunities. 

    I hope that helps. The video has a lot more info regarding my entire process. 

    0Reply
  • Dawn BrenengenBusiness Member
    Moderator
    Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
    10y

    I try to allow two days in-between tenants, one for repairs, paint/carpet and one for cleaning.  I typically start showing an occupied unit 30 days before the lease ends, but this assumes the home is in good shape.  They usually are.  

    Podcast Guest on Show #101
    0Reply
  • Lisa B.
    Toronto, Ontario · Member since 2015 · 62 posts · 9 votes
    10y

    I have also found that with prior knowledge of unit condition and exellent tenant relationships typically there is no problem showing unit early. I have had amazing tenants who will show the unit for me and even give a great review for the incoming tenant. Having consideration for exiting tenant helps greatly.  Try to lump showings together to minimize entering the unit.  Having great pre-rent pictures helps immensely.

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