Are you a landlord? Even if you own only one rental property you are.
Do you know how tenant turnover affects your bottom line, what it actually costs you? It’s vitally important that you do.
We have an online software system for our property management – Appfolio. They recently conducted a landlord survey and here are some highlights from their findings:
- Property owners are generally not aware of the high cost of tenant turnover.
The survey indicated that less than five percent of property owners truly understand the total cost of switching tenants.
- The typical cost for changing tenants is nearly $2,000 – you can double that for uncooperative tenants who must be forced out or evicted. While eviction time periods vary due to state laws and such, it’s clear that it takes at least twice as long to re-rent the property than a normal tenant turnover.
- Vacancy rates for professionally managed rentals are half the national average for rental housing as a whole. The survey indicated an average vacancy rate of four and a half percent compared with the national average of nine percent. This means that professional property management pays for itself based on this one benefit alone.
- Most Property managers consider tenant screening the number one factor in reducing vacancy rate. But there are other important activities throughout the life cycle of tenancy that impact length of stay and overall tenant satisfaction.
Property Managers need to emphasize that keeping quality tenants for longer periods of time is a key value-add of the service they provide. Doing this is a multi-faceted endeavor that starts with superior tenant screening, but includes less obvious attributes like customer service, prompt repairs, good listening, and even advocating for improvements that make both the tenant and the homeowner better off.
Do you use a property management company? What do you do to prevent tenant turnover?