Tenant turnover can be a costly endeavor for rental property owners. Losing a good tenant without another one to fill the vacancy means a loss of steady revenue for an unknown length of time. Plus, new tenants often mean cleaning, maintenance, and repairs that can’t always be charged to the previous renter. Though there can be some challenges to overcoming lost revenue during tenant turnover, experienced property managers know ways to avoid revenue loss and increase profits during the search for new renters.
PRIOR TO SCHEDULED MOVE OUT
As soon as a resident has submitted a move out notice property managers can take some immediate steps to limit lost revenue. Some of these steps are:
- Acknowledge the move out notice and date in writing so that there are no misunderstandings about when the property will be vacant and the keys returned.
- Schedule a pre-move-out inspection to so the tenant knows they need to repair or replace and what needs to be cleaned.
- Make sure the tenant understands the purpose of the security deposit and doesn’t believe they can withhold the last month’s rent.
- Do the final walk-through inspection with the tenant, after the property is empty. Take pictures and discuss any problems that will result in a deduction from the security deposit.
- Make sure to have the tenant’s forwarding address and verify contact information.
PREPARE A DISPOSITION OF DEPOSIT
A disposition of deposit is an itemized accounting of the cost that the property manager or property owner will spend to bring the property back to a rentable condition. It cannot include costs due to common wear and tear but should include all other amounts owed or due by or to the tenant. These amounts can include outstanding past due rent, prorated rent charges, and/or refunds of rent.
Providing a disposition of deposit does not guarantee repayment as tenants sometimes dispute fees assessed from their security deposit. Good documentation, photographs, cleaning and repair receipts, and convincing communication can sometimes help convince former tenants to comply. If a tenant continues to refuse to pay what they owe, efforts to recover lost revenue may be needed.
DEBT RECOVERY AFTER THE TENANT HAS MOVED
When a former tenant ignores an initial request for repayment a professional property manager such as Martin Feinberg understands that oftentimes consistency is key. Certified letters sent periodically reminding former tenants of the debt that is due can help renters realize that the issue isn’t going to disappear. A formal demand letter from an attorney or paralegal can also send a clear message that repayment is required.
If a former tenant is withholding payment because they disagree with an assessment of debt owed, property managers can offer a dispute resolution meeting with or without an arbitrator to help expedite the process.
If a tenant still refuses to acknowledge or pay their debt, professional debt collectors might be the next step. Rent recovery services need to be reputable and law abiding, and should also specialize in debt collection for the rental industry if possible.
When all else fails, suing a former tenant for unpaid rent or other lost revenue can be the option of last resort. Winning a civil suit case gives a landlord greater recourse in pursuing repayment by way of wage and tax garnishments.