Let’s talk Turnovers! Does that word make you cringe? If it does then you've been doing something wrong because I actually really don't mind them! It gives us a reason to thoroughly check up on the property, clean it up, fix things that need fixing and evaluate if there's any room for adding value and upping our monthly cash flow somehow. It also gives us a chance to review the lease terms before the next tenant in case we missed certain things during the last tenancy as well as review the rent price.
I’m going to give you our 5 secrets to a headache-free turnover... you ready? Drumroll pleasee...
#1. A good tenant
The #1 key to a smooth turnover is a good tenant. If you have a bad tenant in place, forget the rest of this article because no matter what, chances are it will not go smoothly. Having a good tenant in place goes back to your Screening Criteria & Screening Process (see my post about this). If the tenant that you have now is leaving soon and you're worried about the condition the place will be left in, then chances are you did not screen this person well initially. The only times we worry about that is when we know the tenants we had may not have been the best... The good tenants will leave the place in a good state and the not so good tenants will leave the place in a not so good state... Either way, I mark a rating on their file when they leave on a scale of 1 to 10 along with a couple notes maybe of how likely I would be take them again in the future. That way if ever you hand over your properties to a PM later and those tenants happen to apply again for another unit or you get a reference call from another landlord, it’s easy to refer back to the file.
#2. A firm process
Processes are super important in any business and writing down those processes is key. That way you not only condition yourself to never forget a step but you can handover this written process to train a future employee and to let them handle that process in a way that's always consistent. So as you come to do more turnovers, you'll get to see what works for you and what doesn't and figure out a set routine to make everything run smoothly every single time. Do you hire someone to do the patching, painting and cleaning? Do you have the tenants patch and paint before they leave? Do you give them a Moving Checklist to follow? Do you want to do a contactless exchange with a lock box? These are all things to think about and include in your written process.
#3. Walk-Through Reports
Have a Walk-Through Condition Report as part of your turnover process. I prefer to fill it up with them when they move-in and again when they move-out. Trust me, you need to have this report. We have them sign it when they move-in and then we send them a copy by e-mail for their records along with pictures or videos you took of the unit during the walk through with them. When they move out we use the same copy to fill out the move-out column and have them sign again along with their new forwarding address. Here's what our report looks like:
#4. New Tenant Orientation document
After reading Brandon Turner's Book on Managing Rental Properties (I highly recommend this book) we made our own spin on a New Tenant Orientation document that we usually leave along with the keys and a Welcome Basket. This document should highlight your policies and should help answer any questions they may have. You can also have them read it and initial it to make sure they fully understand it. Here's what our document includes:
#5. Optional Welcome Baskets
You don't have to do welcome baskets but we like to do them because we find it helps to start off the tenancy on a positive note. The content's of our baskets usually differ but we like to include items from local businesses and include their business cards, along with a couple things from the dollar store that could be useful during the move like toilet paper, garbage or recycling bags, batteries, furniture pads, etc. We also have a local restaurant that donates 10$ gift cards for us to add in our baskets. Talk to local business owners and encourage each other! It's good for business on both sides :)