Imagine: You have just enjoyed a 5-star dining experience at your favorite fine dining restaurant. Everything was spectacular. The service, the ambience, the food – everything. You hoped it would be excellent, after all, you paid for the experience. Now, instead of paying the check and leaving, you head to the back of the restaurant and wash all the dishes you just used.
This makes no sense, right? I mean, you’re not getting a discount for washing the dishes – that cost is rolled into the cost of your experience – so why do the extra work?
This is a bit like some clients who pay Real Estate Solutions to professionally manage their property, receive excellent service and financial results, but then at tenant turnover, the landlord jumps in and decides they want to handle the turnover work. Even though there is never a charge from RES for this work, and even though the cost of coordinating all this work is already incorporated into our (very low) management fee.
It makes you wonder!
On its face, you may think “Yes, but the landlord can save money by doing the work themselves.”
This, unfortunately, has never been our experience, in terms of the full cost analysis. Not once. Here’s why:
- Time. RES turns properties over FAST. We are so confident in our ability to make a property rent-ready after a tenant moves out, we will list them as available only a few days after the lease end date – regardless of what we anticipate the property condition to be when we arrive for our move out inspection. Fast turnovers mean less vacancy. Less vacancy obviously means a lot more money in the landlord’s pocket. Here’s a representative example in the Denver market. A property rents for $1900/month, so each day of vacancy costs the landlord $63. Most landlords who handle the turnover work have other jobs and commitments to attend to, so their turnover process can drag on for 2 weeks, 3 weeks and sometimes over a month. This means they are losing $882 – $1900 – right off the bat.
- Quality. RES has vendors who do the work right – the first time. This is important – not only to reduce costs and trips to properties – but also, and more importantly, to keep tenants SAFE and happy in a property. We ensure properties have working smoke detectors, CO detectors, changed locks (digital door lock codes) and more in between tenancies. When a landlord jumps in to do this work, many of them cut corners on this very important part of the job. They shift the burden to RES to “catch” their errors during our showings or during our move in inspection. Our vendors know we will hold them accountable for every item on our rent ready checklist. If a tenant moves in and the smoke detector 30 feet in the air is beeping on their 2nd night in the property, that’s a problem. Doing the work right keeps tenants safe and happy – and besides being the right thing to do, it costs real money to do it the wrong way
- Money. Landlords who do their own work don’t always understand what their time is worth. We all have limited time, and when you’re paying for a professional service to do a job – and that job doesn’t cost you anything out of pocket – why jump in and help with the work? Landlords may also fail to appreciate that the time they spend at their rental is not tax deductible. If the move out was a lease break, the entire security deposit (plus usually an entire month’s rent) already goes to the landlord. If tenants leave a property dirty or without the carpets steam cleaned, or with any damage, these items are all also going to be security deposit claims – the money does not come out of the owner’s pocket, it comes from the tenant’s security deposit. RES coordinates the work, and we don’t charge for our time and resources. We do it fast and we do it right. Why would a landlord want to handle these tasks when they are done quickly, professionally and at no cost by the property management company?
- High standards. Landlords miss things and their fit and finish is not on par with the expectations of a professional management company. When RES is handling turnover, we ensure the property is RIGHT. It’s spotless. All lightbulbs work. All smoke and CO detectors work. Appliances work. Door codes are changed. Damage is addressed. Blinds are functional. All equipment (garage openers, mailbox keys, etc.) are present and accounted for. Landlords? They just can’t match this level of detail and consistency. It’s not really their fault – they have 1 or a few properties, but RES manages many hundreds of properties and has dialed in our turnover protocol.
- Liability. This is potentially a big one. If a landlord tells us they put in a new CO detector but didn’t, if they install a new gas range and didn’t properly connect the gas line, if the landlord attempted electrical work, or if they did any other work in the property that was not done to code, the consequences could be enormous. When it comes to people’s safety and when it comes to legal liability, “good enough” is never good enough. Professional property managers are well versed in the various trades and can quickly determine which tasks require a licensed professional and which tasks do not.
In well over a decade of doing this, I can’t stress enough that vacancy time is the number one killer of rental property profits. Yes, you might need to fork over $1,000 for a hot water heater every 15 years, or a few thousand for an AC repair every 20 years, but the vacancies in between – and the avoidable vacancies because tenants do not want to stay in a home that wasn’t made ready for them – are what really eat away at returns. And, prolonged vacancies are avoidable, with competent management.
Delaying the turnover process and needlessly sitting on a vacancy is like buying 30 cups of Starbucks coffee for your friends every single day. Aren’t you generous?! 🙂 Only, in this scenario, no one gets coffee, you just have an empty rental home.
So there you have it. If you’re a landlord, let your professional property management company do what you have already paid them to do! Speaking for us here at Real Estate Solutions, we are happy to do it and it’s part of what you pay us for.
After all, we are your asset managers. Our business only exists to maximize the financial returns of our landlord clients. Great property management always puts more money in the landlords pocket than it takes out in management fees – and we will do the same for you if you let us.
**Note: we do believe there are a few exceptions, where landlords could and reasonably should jump in to work on the property during turnover:
- The landlord is a painter (or at least can pass as one) and the property needs new paint. The landlord can get it done in a day or two and save a lot of money on labor. Go for it!
- The landlord wants to change out appliances and can install them his/herself and save some money on the labor. Not a problem, as long as it’s done quickly!
- The landlord wants to upgrade the landscaping and it doesn’t prolong the vacancy period. No problem!
- Any other improvements that don’t prolong the vacancy period or interfere with your property manager’s processes designed to make you money and reduce your vacancy time!