When you have 25 tenants that you manage, like i do, you will have tenants move out. And some move out in the Winter. When the tenants move out, you need to get a new tenant as soon as possible. Vacancy is your number one avoidable expense as a landlord.
I have already filled my West St Paul duplex lower unit that went vacant after I moved my Section 8 tenant out. That new tenant is in, and had already paid March rent. So, it appears for now, that tenant will be solid. My income for that unit is slightly less, $1,220 vs. $1,221. I also sacrificed my laundry revenue as I changed the laundry to free.
My upstairs unit at that same property also has a turnover coming. The tenant has purchased a home, although not through me. They did not know I was a Realtor, my bad. That family leaves by the end of March. I have a new tenant lined up for April 1, although the new tenant wants to rent beginning ~3/24.
To keep everyone satisfied, I offered my existing tenant an opportunity to pay half of March rent, and be out by 3/13. They are trying to determine if they can get moved to their new house by that date. Since they close on the new house on 2/27, and it’s less than ½ mile away, I do not see too many issues with a mid-month move out.
Changing Rents
My rent for the upstairs unit has increased by $50, and since the tenant always went to the laundromat, there is no loss in revenue from the laundry.
The net result is about break even, although with better tenants, it should be more profitable. I will probably replace the kitchen floor on the upper unit during the week of vacancy.
One of my Eagan properties vacates this weekend. I have a new tenant lined up for that unit already to move in on 3/15. The rent is slightly lower, because the person has no pets. Since there are also fewer occupants, there should be less wear and tear. It is a military officer that intends on buying a home in six to eight months. I should be able to represent him on his home purchase.
The current tenant closed on the new house today, and I represented the family in the transaction. I lost a tenant, but gained a real estate commission.
I have three (or four) more tenants moving this year at some point. One is waiting on a short sale approval. They made an offer a couple of months ago, so if it goes through it will likely be at the end of May for a vacate date.
A set of tenants is moving to another apartment closer to downtown St Paul, so I have started advertising that unit for a 5/1 move in date at a price of $30 more. If it does not rent, I may do a mini-renovation and install a washer and dryer. It needs new carpet anyway, and would be a great tome to do it.
More Tenants Leaving – Yikes
Another tenant gave notice today, as they are buying a home. They did not get my letter saying I was a Realtor in time, or I would have had another sale. That would be at least three real estate commissions. Since they are vacating a month or two prior to the end of the lease, they have to pay a penalty. If I can rent it sooner, they might get a break. I will attempt to rent that unit for $25 to $50 more than it is renting for now.
I am still working with a tenant to purchase a home, so if she ever decides to move ahead, I should have another commission and another apartment to fill.
Increase Rents for Existing Tenants
I bumped the rent on a tenant that was paying well below market, but has been there since September 2011. I added $25 to the rent for rent payments beginning on 4/1.
So I am pretty busy filling apartments, and getting knowledgeable in Real Estate sales. I sold homes in the early 80s, and it is even easier now. More things are computerized, so it saves a lot of time. I just need to focus on the tasks at hand and not neglect the rental part of my income. So far, vacancy has been minimal.
Conclusion
So, if you are keeping track, three new tenants have been acquired. I have two upcoming vacancies that I need to fill, where I know the exact dates the new tenants can move in. Both of those move out dates are 5/1, although one tenant is obligated to pay until 6/30.
I have one tenant that has given a ‘soft’ notice, and will give a hard notice in the next couple of months. I have another tenant that will look for a house soon, and will use me for a Realtor, but there is not date set yet.
If you have been counting missed opportunities to sell a tenant a home, it is two. Two tenants would have used me, and one already had a relative in the business.
And meanwhile, the stock market continues to rise, and my retirement date from my day job is getting closer. Only 496 days and counting. I am really thinking that I do not have time to go to work. Work really gets in the way of a lot of things.
Have you ever had multiple vacancies at the same time? What do you think of my strategy to help facilitate my tenants in their home purchase as their Realtor?
Would it help you make your rental decision easier if the landlord would be your Realtor and make the transition to getting out of the lease easier?