10 Tips for Handling Vacancies and Unit Turns

As you continue your journey into real estate investing, you quickly learn that vacancies can easily become one of your biggest expenses. After all, an empty unit is not providing income, and it is not providing someone with a home. That is why it is important to build a good system to handle vacancies as quickly and efficiently as possible. 

Because Coastline Equity is a professional property management company, we can turn over vacant units within just about any kind of property, whether it is residential, office, or retail. When it comes to residential units (which turn over more frequently), we are fortunate to have a team of people ready for all the related tasks, like inspections, construction, and leasing. 

In this post, we want to focus specifically on getting your unit to rent-ready condition before the leasing step gets into full swing. We want to do that by quickly sharing with you some simple but important tips that we have picked up along the way and that you should keep in mind too. 

And so, here are 10 tips for handling vacancies and unit turns: 

TIP NUMBER 1 - GET THE MOVE-OUT NOTICE IN WRITING

First and foremost, we need to ensure that we are protecting ourselves and making our lives easier in the future by taking that extra time up-front, to make sure that we have the tenant’s move-out notice documented in writing. Oftentimes, an existing tenant will call you up or talk to you in person, letting you know that they intend to move out soon. Instead of simply taking a mental note of this, or even writing it down in a notebook or calendar, make sure to tell them that you will need to receive that notice in writing. 

If you use professional property management software as we do here at Coastline, the tenant can quickly and easily enter their move-out notice into their tenant portal. This way, you will be sure to get all the essential information you need, and the entire move-out process will be initiated within your software’s move-out system. 

Otherwise, email is the second-best option. Simply have the tenant email you and include the date that they are sending the notification, the actual date that they will be completely moved out (which, in most cases, is simply 30 days from the notification date), and a forwarding address that you will use to send them any letters or security deposit amounts. Remember to save a copy of this email somewhere safe and easily retrievable. 

TIP NUMBER 2 - CREATE TEMPLATES FOR YOURSELF 

There are certain notices and letters that you are legally required to send to your tenants during their move-out process. One of them is the Acknowledgment of Notice to Vacate. This is an official confirmation that you have received their move-out notice and that the two of you are on the same page in terms of dates. 

You might also want to consider including an offer to do a pre-move-out inspection. This is an initial inspection of the unit before the tenant moves out, which can help you to set expectations in person before they leave. Then, of course, you will want to list any specific responsibilities that the tenant has during the move-out process. Much of this is up to the interpretation of your lease but the point is to be as thorough in your communication as possible, to avoid disputes later. 

Another template that is good to have is a general outline for a Disposition Letter. This letter details any security deposit amount that the tenant is receiving back after your final move-out inspection has taken place and any work required to bring the unit back to rentable condition has been completed. You are required to send this letter to the tenant no later than 21 days after they have moved out. 

We have found that having documents such as the Acknowledgment of Notice to Vacate and your Disposition Letter ready in pre-made templates, saves you time, is much more systematic, and makes it less likely that you will forget to include any essential information. 

TIP NUMBER 3 - RECORD THE EXPECTED MOVE-OUT DATE SOMEWHERE OBVIOUS 

Whether you save it onto your smartphone’s calendar, write it on your main to-do list, or write it on a giant whiteboard hanging on your office wall, make sure that the notice date, the move-out date, and the 21-day security deposit timeline are written somewhere that you check often. 

Because the Disposition Letter and any security deposit that the tenant receives back are legally required to be sent within 21 days of move-out, you need to make sure that you are always aware of how much time you have left to complete the move-out process, in order to stay out of legal trouble. This may sound obvious, but this is one of those things that can be easily taken for granted until you realize that you are past the 21-day mark. So do yourself a favor and make sure you have all this information in a place where it cannot be overlooked! 

TIP NUMBER 4 – ASK TENANTS FOR FEEDBACK 

A move-out can be a great opportunity to get some honest feedback from your tenant. Since the lease will be ending, tenants tend to be much more candid about things like the upkeep of your property, the reliability of your onsite manager, or the likeability of their neighbors. All this information can be useful for addressing issues and improving tenant retention in the future. 

Again, if you have access to professional management software, you can have your system send the tenant a survey automatically once their move-out has been completed. Otherwise, consider providing them with a simple, one-page handout or an email.

TIP NUMBER 5 - START THE MARKETING PROCESS IMMEDIATELY

In a perfect world, every time a tenant moves out, a new one would take their place on the same day, leaving no vacancy period in between. While this is possible, things do not always work out so seamlessly. Still, you always want to strive for that quick turnaround time so that you can maximize your income. That is why you should jump into leasing mode as soon as a tenant gives you their move-out notice. 

Start by placing “for rent” signs out front. Assuming you are not going to be making any huge changes to the space, begin gathering any photos that you already have (from when that unit was last vacant) and start writing a marketing description. Our management software allows us to create one marketing campaign that will then be posted to dozens of different websites. You can also save all the key information in a word document and then paste it onto each individual website you want to list with. 

You may even be able to start showing the space right away to prospective tenants, but we will come back to that in a bit. For now, just start getting all your marketing material organized and ready and start collecting information from anyone that responds to your rent signs. 

TIP NUMBER 6 - CONSIDER PRE-MOVE-OUT INSPECTIONS

At first it may not seem necessary to inspect the unit before the tenant has moved out (and while all their belongings are still in place) but, if you have the time, doing a pre-move-out inspection has a few benefits. 

First, it gives you another chance to clearly set expectations for the move-out and how the tenant can get their security deposit back, hopefully eliminating any confusion later. The tenant should already have this information in writing (from when you sent your acknowledgement letter) but sometimes tenants do not read carefully enough, and so it is good to have this conversation in-person as well. 

Although the tenant’s furniture will be blocking a lot of areas, this inspection will help you to see any glaring issues, enabling you to start getting quotes and lining up any vendors that are needed to address them. Just make sure that the tenant knows that the final move-out inspection may reveal additional repairs that were not seen during the pre-move-out. 

TIP NUMBER 7 - BE CRYSTAL CLEAR ABOUT EXPECTATIONS 

This was something alluded to earlier, but it is worth mentioning on its own. We have seen cases in which the tenant tried to receive more of their security deposit back by cleaning the apartment themselves but were disappointed to learn that they did not clean it well enough, leaving hours of work left to be done. 

This is why it is a good idea to be thorough in explaining your expectations. If you have certain cleaning standards, be specific about what they are. Are there particular paint colors they need to use? Let them know the brand and color codes. If you require that tenants use pre-approved vendors, make sure they have all the necessary contact information. And let your tenants know what they should do (if anything) about things such as small holes in the wall from their picture frames, missing light bulbs, or any animal-related issues. 

TIP NUMBER 8 - CONSIDER PRE-MOVE-OUT SHOWINGS

In many states (such as here in California), a property owner is legally allowed to begin showing a unit to prospective tenants before the current tenant is completely moved out, so long as the current tenant is given 24-hour notice in advance. 

This should appear somewhere in your lease, but it is something that is often overlooked by tenants until they are surprised to hear that you have the legal right (and do not need their express permission) to enter the apartment and start showing it to prospective renters while the current tenant is at work. Despite your legal right, this is a situation that can easily turn into conflict that makes life more difficult for everyone involved. 

But do not let this dissuade you entirely. If you can communicate these things early, be sensitive to the current tenant’s concerns, and even offer them incentives (e.g., free cleaning of the apartment), conducting showings before the current tenant moves out can help you keep vacancy periods to a minimum. 

TIP NUMBER 9 - CONDUCT THE MOVE-OUT INSPECTION ASAP

Once the tenant moves out and removes all their belongings, you will want to get in there right away to conduct your final move-out inspection. This may sound obvious, but it can be surprisingly easy to let a few days go by, especially if you are busy with work elsewhere. However, the rest of the move-out process (from remodeling, cleaning, security deposit return, and marketing) typically cannot start until you have gone in and evaluated the unit first, so make it a point to leave time in your schedule to walk the space as soon as it is empty. 

If you intend to walk through the unit alongside your go-to contractor or repair person, make sure they are aware of the move-out date well ahead of time, so that they can be available to meet you there that day. 

TIP NUMBER 10 - HAVE A TEAM AND BASIC QUOTES READY TO GO

Speaking of contractors and repair people, it is a good idea to have quick access to at least one or two that you trust, that you use often, and that you can rely upon to give you timely and reasonable quotes. There is nothing more frustrating than feeling like you have prepared yourself for a quick turn-around, only to end up having to wait on someone else. Some vendors that are great to have on-hand for basic unit turns are flooring vendors, painters, and cleaners. 

That is our list of ten tips for preparing for move-outs and vacancies. Look for our other posts that dive deeper into topics such as what to look for during a move-out inspection, preparation for successful showings, and fair housing law that you should know when advertising your rental unit!