Good morning,
One of your biggest costs as a landlord is tenant turnover. It’s not an enjoyable process: you have an empty unit with no rent coming in that you are paying the utility bills for, and trying to renovate, advertise, and screen for tenants.
It can be a headache, but it also can be an opportunity to renovate a shabby unit that in turn can bring a better-quality tenant and higher rent.
A quick note: If your property has already been renovated & there is no work to do, I try to find new tenants before my old tenants move out. I will even offer tenants a $200 bonus if the unit gets rented before their move-out date. I found this incentivizes them to keep the place clean & they cooperate to show the unit to prospective tenants.
Assuming your property needs some work before it’s rent ready, here are some ways that I reduce the cost of turnover.
5 tips for saving money during tenant turnover
Tip #1: Use the same kind of paint
I buy paint in five-gallon buckets. I use the same paint color in all my units; one color for the bedrooms, and a different color for the rest of the living space. This way, I’m paying less by buying in bulk, and there is no question about what color paint goes in which unit. This saves me a ton of time and money during every turnover.
I used to let tenants paint if they wanted to (when I first started out I thought “why not?”). What I found was that they’d often use the wrong paint or the wrong finish (flat, not semi-gloss) or they’d paint a really dark color. It got to be expensive and time-consuming to fix when they moved out. Now I state in the lease that they can’t paint the walls, cabinets, or anything else in the unit.
Tip #2: Refinish bathroom tile
Replacing a bathroom can be very expensive. The material and labor costs can vary between $4,000-$10,000 depending on the size. A great alternative is to refinish the tub and tile in the bathroom instead of replacing it completely. If the tile and tub are in good condition but dirty, discolored or an ugly color – then it’s a perfect option.
I’m currently renovating the bathroom of one of my units. I recently paid $800 for a tub and wall tile refinishing. Here are some before and after photos.
The white tile looks new and gives the whole space a fresh, clean look.
Tip #3: Mix flooring
Oftentimes, flooring can be one of the largest expenses when renovating. I’ve found that either ceramic tile or vinyl plank flooring is the most durable. They are both waterproof and scratch-resistant. But it can be a little pricey to have installed ($3-$6 a sqft depending).
One way I mitigate cost is by putting carpet in the bedrooms and then (usually) vinyl plank throughout the rest of the unit. Carpet is the cheapest flooring option ($1-2 a sqft) but does not last long. However, bedrooms have the least traffic and the least amount of stains. I personally find carpet will last a lot longer in the bedrooms compared to the rest of the more high-traffic areas in a house (like the living room). Tenants also tend to like carpet in the bedroom. So, I find this a great compromise to cut back on flooring costs.
Tip #4: Easy kitchen fixes
Unless the kitchen is in terrible condition and needs to be gutted, you can save money by keeping the cabinets and replacing existing fixtures. Replacing the handles and hardware for all new, updated ones is a low-cost way to upgrade your kitchen. You can go even further, if needed, and paint the cabinets. Painting the cabinets gives a whole new look to the kitchen for just the cost of paint and sandpaper.
In my unit, we decided to paint the cabinets white and also refinish the countertop. It’s half the price of a new countertop but makes it look like new. It was done by the same company that refinished the tub and tile. Here are some before and after photos:
The last step for us is to paint the backsplash white. The backsplash tile is in great condition, so to save time and money, I’m going to paint it. Tile paint is cheap, and it will give it a clean, fresh look. (We’re doing that last step this weekend)
Tip #5: Discount appliances
There will be a point when turnover means replacing the appliances in a unit. There are a few ways to save money when appliances need to be replaced.
A good place to start is with appliance outlets. Sort of the Marshalls or TJ Maxx of appliances, they have older or unpopular models that they sell for cheaper prices. There are also companies that sell appliances that have been ‘damaged’. Oftentimes this is just a big dent down the side or a noticeable scratch. You can find appliances selling at a big discount to retail value. We found a refrigerator that had a huge dent down the left side, but in our rental unit the fridge sits in the wall, so you could not see the scratch. We bought a $1,500 fridge for $850. Check out the website: www.americanfreight.com.
Another option is to buy used. Like a new car, buying used appliances can be an economical option. I will look on Facebook marketplace or at appliance outlets for slightly used appliances. They are hugely discounted in price and can last many years. There are a number of reasons people sell their appliances that are like new and barely used. You can take advantage of these situations.
In Conclusion
Overall, the goal with turnover is to complete the work as quickly as possible on a reasonable budget. It takes some planning and time management, but it can definitely be done. Our turnovers average two weeks and we usually will have a new tenant in place within a month.
Next time we’ll talk about how to find new tenants for your newly renovated property.
Cheers,
Mary
Mary | Money Smarter (@GetMoneySmarter) | Twitter — twitter.com
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