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Property Management Blog

TAKE CARE OF YOUR TENANTS AND THEY WILL TAKE CARE OF YOU

Mendell Gosnell - Monday, November 14, 2022




When it comes to rental properties, it is well known that long term tenancies and good tenants are assets. The cost and the headache of vacancies and high turnover are well documented and are major determining factors in the profitability of your units. 

So how does taking care of your tenants take care of you in the long run? You can see this by breaking down the costs associated with a unit that has had tenants that don’t care. Tenants that don’t care lead to more costs than the damage they create in the unit. 

Here are 6 specific areas that showcase why it pays to care for your tenants.


6 Major Costs That Come with Vacant Units


  1. Property Rehabilitation Costs 


Rehabilitating your property after a tenancy can be very expensive. Even in units that don’t have a lot of major damage, there are lots of small and medium costs that add up… quickly. If you have a lot of turnover in your rental property, these costs compound. 


If a unit has one tenant for 5 years and another unit has 5 different tenants over 5 years, the cost of operating the unit with high turnover will be much larger than the unit with one tenant. In fact, if you were to keep one tenant over 5 years, the money you would save by not having to incur the turnover costs could even pay for an upgrade that could dramatically increase the value of your rental property.


Consider this list of expenses that come with rehabilitating your property.


  • Clean the carpets

  • Professionally clean the entire unit

  • Paint and repair any chips or damaged paint

  • Repair any holes or dings in the drywall

  • Door and window seals or screens

  • Small repairs like closet doors or hardware for drawers and the cupboard.

  • Whatever else makes it on your punch list of items to complete before the unit is ready


  1. Ongoing Carrying Costs 


For every property, there are carrying costs associated with the unit. These are the expenses that don’t fall on the landlord when the unit is rented because these costs belong to the tenant. When a vacancy occurs, the only person left holding that bill is the landlord and these bills can also add up quickly.


  • Utilities such as gas, power and water are still an ongoing expense in the unit.

  • Any lawn care and yard maintenance need to be kept up to date (especially since the units will have viewings with potential tenants).

  • Cleaning is another expense if it is needed. This is particularly important in areas with a lot of wind or dust.

  • Upkeep and oversight of a vacant unit also carries a price tag. This is for security guards or maintenance crews that go in and check on the unit. If your unit is somewhere that has freezing temperatures in the winter, this is critical.


  1. Hidden Costs 


Other ongoing costs come with an empty unit. These costs are covered by the rent when there are tenants in the unit but when there is a vacancy, these costs fall back on the landlord. These costs can include…


  • Mortgage Payment While Vacant

  • Insurance

  • HOA Dues

  • Taxes

  • Etc…


  1. Cost to Find New Tenants 

These costs can spiral upwards very easily. The amount of time, effort and actual money that goes into procuring new tenants is, at the very least, significant and they can be astronomical. These costs can be divided into two groups. The Monetary Cost and the Time Cost.

  • The Time Cost: This is all the time you spend finding a new tenant. Interviews, viewings, administrative time processing applications. All of this time costs money.

  • The Monetary Cost: These include procurement costs, rekeying the locks, paying for inspections, logging inspection photos, etc.


  1. Catching Up on Deferred Maintenance 


There are always hidden and unexpected costs that are related to deferred maintenance issues. Instead of being able to pass these costs along to the tenant (if they were their fault), these costs are now the landlords.


  1. Danger and Stress of Unoccupied Property


Some dangers are more likely with an empty unit. Vandalism is more likely, as well as the chance of a break-in or theft.


Other costs come with applicant denials, tenants that fail to move in when they were supposed to, new tenants that are not as good as the previous ones or administrative mistakes during the application process.


Lastly, the stress of dealing with a vacancy and filling it is not comfortable or healthy for anyone. It is best if you can avoid that as much as possible.


How to Avoid These Additional Costs


You will never be able to avoid all of your tenant turnover. However, by taking care of your tenants they will take care of you by helping you avoid the cost of unit vacancies. A professional property management company can help reduce the turnover by making sure that your tenants are taken care of. This is what Centurion Property Management does for you.

Centurion Property Management. Proudly taking care of your tenants and taking care of your properties. Reach out today.


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