Tenants want to switch apartments

13 Replies

I have a four unit building, apartments 1, 2, 3, 4.  Each apartment is different, some are two BRs, some are 1BRs, and they are all different in sizes, with slightly different layouts.  Making each unique.

Unit 3 is moving out at the end of a lease.  Unit 4 wants to move into unit 3.  Unit 2 wants to move into unit 3 as well, and Unit 1 wants to move into unit 2.  They all have their reasons, the other unit is bigger, more natural lights, its an end unit, closer to laundry, more storage etc etc etc...

I have done this in the past, allowing one unit to move into another, but it translated into more work because instead of having to turn over one unit for rent, I have to turn over two units.

Now, with unit 3 moving out, instead of turning over unit 3, if I let them all switch, I have to turn over ALL 4 UNITS!  That translates into more time, effort and cost.

I don't think I can selectively pick and say unit 1 can switch but unit 4 cannot.  That would create some negativity between me and unit 4, and some between the tenants themselves.  I would have to say yes or no to them all.

One option - is to do some calculations and figure out what it might cost me.  Then approach each tenant who wants to move with a new lease - because a new unit requires a new lease and a different (HIGHER) rent.  Some may elect to stay once they find out how much (although they know how much the existing tenant is paying).

Thoughts on how you would handle this?

you already know the answer and the reason.

only do it if you wanted to upgrade/renovate the occupied units at this time.

You answered your own question in your post. If you allow them all to switch it directly leads to more time and money you have to spend on additional turnovers. If a tenant is paying in the unit they are occupying just hold them to their lease. A lot of times tenants just ask this to see what you will say, and don't really care that much about moving from unit to unit. 

Tell them the rents are going up for the new units and that you do this every time there is a vacancy.  You could also end up having a vacancy for a bit because you can't move 2-3 units at the same time.  Give them a couple of days to decide and then go from there.  

While it might be chaos for them trying to all move (and you deal with security deposits), at the end of the day, you'd be getting more rent for 2-3 units.  Add that up over the course of a year and decide if it is worth it.  They are the ones doing most of the work as they have to pack and unpacked.

You have two people who want to move into the same unit-ask them how you should decide, draw a name out of a hat or the person that was there the longest gets first choice.  If that is unit 4, then you only have 3 units turning over because unit 1 can't move unless unit 2 does-domino effect.

Originally posted by @Sam Leon :

I have a four unit building, apartments 1, 2, 3, 4.  Each apartment is different, some are two BRs, some are 1BRs, and they are all different in sizes, with slightly different layouts.  Making each unique.

Unit 3 is moving out at the end of a lease.  Unit 4 wants to move into unit 3.  Unit 2 wants to move into unit 3 as well, and Unit 1 wants to move into unit 2.  They all have their reasons, the other unit is bigger, more natural lights, its an end unit, closer to laundry, more storage etc etc etc...

I have done this in the past, allowing one unit to move into another, but it translated into more work because instead of having to turn over one unit for rent, I have to turn over two units.

Now, with unit 3 moving out, instead of turning over unit 3, if I let them all switch, I have to turn over ALL 4 UNITS!  That translates into more time, effort and cost.

I don't think I can selectively pick and say unit 1 can switch but unit 4 cannot.  That would create some negativity between me and unit 4, and some between the tenants themselves.  I would have to say yes or no to them all.

One option - is to do some calculations and figure out what it might cost me.  Then approach each tenant who wants to move with a new lease - because a new unit requires a new lease and a different (HIGHER) rent.  Some may elect to stay once they find out how much (although they know how much the existing tenant is paying).

Thoughts on how you would handle this?

 Just say no.

Sure, but the rent is +$20/mo. Not much for them, but hopefully the extra $240 in the first year will cover the turnover costs. And if they stay longer, all the better.

Or if you don’t think that’ll work, you can move, but you take it as-is. No repainting, no extra cleaning, etc. so no turnover costs for you.

Originally posted by @Mike McCarthy :

Sure, but the rent is +$20/mo. Not much for them, but hopefully the extra $240 in the first year will cover the turnover costs. And if they stay longer, all the better.

Or if you don’t think that’ll work, you can move, but you take it as-is. No repainting, no extra cleaning, etc. so no turnover costs for you.

 Well having done 1,000's of turnovers over the years I can assure you that $240 turnovers are nowhere near the norm. Beyond that there is no upside to the property owner to let them move. They can rent the vacant unit to other tenants. What is the benefit to having to do more turnovers than necessary? It's inefficient and a hassle. Need to avoid inefficient hassles in this business.

@Sam Leon rewrite leases when moving and increase rents to cover turnover costs over the first year. Either you will recoup your cost after a year and have additional profit the 2nd year or your tenants will decide not to move. Both are wins.

First, I hate moving tenants from one apt to another.  For whatever reason, it just seems to not work out.  So, if you just can't say "no" as @James Wise so eloquently (and correctly) suggests, tell the tenants they will have to take the units in 'as is' condition.  They can do their own cleaning, fixing, etc.  They will probably squawk, balk, and talk to themselves (and you) about how that's not right!

You can explain to them what your expenses are for making each apt rent-ready, plus the additional bookkeeping, expense of drawing new leases, etc.  Give them a number, and let them know if they are willing to pay for all the expenses of your accommodating them, you then, will accommodate.

Originally posted by @Marc Winter :

First, I hate moving tenants from one apt to another.  For whatever reason, it just seems to not work out.  So, if you just can't say "no" as @James Wise so eloquently (and correctly) suggests, tell the tenants they will have to take the units in 'as is' condition.  They can do their own cleaning, fixing, etc.  They will probably squawk, balk, and talk to themselves (and you) about how that's not right!

You can explain to them what your expenses are for making each apt rent-ready, plus the additional bookkeeping, expense of drawing new leases, etc.  Give them a number, and let them know if they are willing to pay for all the expenses of your accommodating them, you then, will accommodate.

 Or...............................just say no.

When dealing with your tenants take the path of least resistance folks. It's never going to let you down. Run your business like a landlord, not a concierge at a hotel. Two totally different businesses.

@Sam Leon

First I don’t quite see how you end up with turning over all 4 units. It sounds like Units 4 & 2 both want Unit 3, while Unit 1 wants Unit 2.

It sounds to me there are three outcomes:

1. You allow Unit 4 to move into Unit 3. You have to turn over 2 units, end of story.

2. You allow Unit 2 to move into Unit 3 and Unit 1 to move into Unit 2. You have to turn over 3 units.

3. You tell them all NO and only then over Unit 4.

Not to be the contrarian, but a couple other things to consider. Depending on your relationship with you tenants they may be understanding of your turnover and vacancy costs. If you can arrange so that they pay part of that up front of recoup in the next 12 months of rent it could be worth it.

Do you see any of the tenants leaving at the end of their lease as a result of not switching units? How much longer would you expect them to stay if you allowed the switch?

@Sam Leon

Personally I’ve dealt with this in the past and typically don’t allow it.

If they are trying to upgrade to a bigger unit I can understand it under certain circumstances . However with that will come increased rental costs, and I explain this. Depending on market rates capital improvements might be needed to command higher rents etc, again I’ll explain this will be the case. Usually deters them from wanting to move.

Unit turns aren’t cheap and when they move out of the existing unit one still needs to do a move out inspection, potentially assess damage fees, in addition to cleaning fees from ones deposit.

That said if issues arise now you just have more problems on your hands when you already had an existing lease and no headaches.

In the short no, in the long run I’d personally rather just let them either stay/give notice and move rather than incur undue hardship as an owner because someone wants a ‘different unit’

Just my $.02 always ends up being a bigger headache overall.

Best wishes,

Dave

If you allow them to switch, you probably will spent more money and energy to deal with the issues. But remember to rewrite lease after they switching to avoid argument.