A long time ago I used to think that the process of turning over residential rental property units was a headache, and a lot of work on various fronts. More vendors to coordinate, more security deposits to reconcile, more vacancy time and less income for owners. Although some of this remains true, over time I have re-evaluated my mindset on the turnover process and now see it as just another essential part of property management, and an opportunity for success. Since vacancies are unavoidable why not use them as an opportunity to shine, and to provide exceptional service to our owner clients?
As property managers, we are truly managing a large investment product for our owner clients – real property. Just like other financial investment products (stocks & other monetary investment portfolios) need to be rebalanced and reworked from time to time, real property is no different. Vacancies are a wonderful opportunity as managers to make improvements to our client’s investments, ensure rent rates are at current market levels etc. However, with the rise of pricing on materials and labor, and the large amount of inflation that we’re dealing with recently, the turnover process can be very expensive which may end up harming owners investments. Finding a balance between tenant retention and managing costs on vacancies is critical.
Over the past nineteen years working in the residential property management industry, I’ve learned a few tips and strategies that I would like to share with our membership that have really helped streamline the vacancy process for our company. Hopefully some of these items are already a part of your process. If not, perhaps you may find some ideas here beneficial.
Floor coverings:
Perhaps the single biggest opportunity for success with the vacancy process lies here. Generally speaking, tenants provide landlords with some form of notice that they will be vacating on a certain date. As soon as the notice to vacate is received by the property manager, the floor covering process can begin. Because flooring vendors can take time to bid jobs, order materials, and perform installations, this process can really start at least a week or two prior to the vacancy. Try posting a notice to enter for the outgoing resident ahead of time, and meet your flooring provider at the property to assess the
condition. A decision can be made early on whether or not the flooring can be cleaned up and saved, or if a replacement will be necessary. Collect a bid at the time (one for carpet & sheet vinyl, and one for LVP vinyl plank flooring). With a couple of bids and some photos, we’re able to work with our property owner client prior to the vacancy to make a decision.
LVP vs. Carpet & Sheet Vinyl:
Unless otherwise directed, we have advised our owners for some years now that our default installation product for new flooring on turnovers will be Luxury Vinyl Plank (LVP) flooring as opposed to carpet and traditional sheet vinyl. I understand that the up-front cost of LVP flooring is more than carpet and sheet vinyl. That being said, there are a wide variety of LVP products with a wide range of prices. Depending on the specific client and their budget, we will select a line and thickness of LVP product that is best suited for their needs. Over time, LVP flooring will pay for itself in spades over carpet and sheet vinyl for a variety of reasons, some of which I will list here. 1) LVP has a very long life span, and can be repaired/replaced in small sections if a portion of it does get damaged. This leads to lower replacement expenses over time with carpet and sheet vinyl which often needs to be fully replaced when it gets torn, stained or otherwise damaged. Less replacement is also less waste that goes to our landfills. 2) LVP reduces vacancy times. Carpet has to be professionally cleaned, sometimes before in-person showings or marketing can begin if it is in poor condition. This requires a time delay in scheduling a vendor for carpet cleaning. LVP flooring can be quickly swept & cleaned upon vacancy and most of the time will allow in-person showings to immediately begin. When the vacancy occurs only a day or two before a weekend, this can mean multiple days of earlier showings and other vendor work is able to be done until potentially having to wait until the following week. 3) LVP is inherently sanitary. With some cleaner or warm bleach water, LVP can be quickly & easily sterilized. Animal dander, skin cells, dirt and other goodies will get embedded in the nap and pad of carpet and is much more difficult to properly sanitize, especially on a regular basis during a tenancy. We have found that units that have LVP flooring rent more quickly, and for a higher rent value than units that have carpet as the majority product. 4) The last benefit I’ll mention here is that LVP flooring is a hedge against animals. It can often be a deciding factor with owner clients on whether or not to allow for household pets in the property. Household pets can lead to more revenue for owner clients in pet rent, and more protection with additional pet deposits. If they aren’t concerned about pets ruining carpet, they are more likely to allow the property to be pet friendly. This will also open the door to a larger demographic of renters with pets, who will not be dissuaded from renting a non-pet friendly property.
Standardized paint color:
White, white, white. I know, boring isn’t it? Hear me out. A standard white paint color that is in as many managed units as possible is an efficiency bump. All paint ages over time, but with a standard white (or off-white) in an eggshell or satin sheen spot painting and touch-up is much more simple for completing normal wear & tear work. With a little washing, wipe down and touch-up, the need for full wall corner-to-corner or full unit re-paints lessens. In 2019, a gallon of paint in my market was around $28. Last week, I bought a gallon of the same paint for $42. I’m not saying that units don’t need to be regularly re-painted, but if touch up can be done or just a few walls at a time, the paint and labor cost will be significantly different than a full unit re-paint. It also cuts down on the time required to complete this work PRIOR to your new flooring being installed which helps streamline the process. Non-white colors and flat sheens of paint are virtually impossible to properly touch up due to how paint ages over time. Every turnover will be a bit different, so try and find that balance between the needs of your owners and the time & workload you are dealing with. Also, it’s pretty easy to let applicants know that they’re welcome to add some color to the property at their discretion if that’s a decision you want to make. Sometimes renters may not like the barnyard red walls that are currently in the property, and if you allow them to paint a couple walls the neutral grey that they like instead being forced to rent an all-white property, they may begin to think about how they can customize the property to their liking and make it home.
Buy in bulk!
Dealing with super high prices of materials, and materials on backorder is frustrating. Whether or not you in-house maintenance or use third-party vendors for maintenance, there is an opportunity in purchasing regularly used materials in bulk, beforehand. Toilet seats, smoke/carbon alarms, stove drip pans, over-the-range microwaves, light fixtures, door stoppers, window blinds….the list goes on. There are repair and standard upgrade items that are used on the majority of turnovers that can be purchased in bulk by a property manager, often at a discount. Contractor packs and bulk orders are often discounted if items are ordered in bulk. Depending on your storage capacity and organizational aptitude, parts can be sold back to properties as needed if they are on-hand ahead of time. This reduces the labor time that vendors spend shopping for parts, and prevents necessary parts from being out of stock when needed.
Countertops:
Who needs granite anyway? Besides the flooring, kitchen and bathroom countertops (and bathtubs & surrounds) might be the next biggest eye catcher that prospects see when they are shopping for a rental property. Outdated and chipped formica and cracked tile with missing grout is definitely not a crowd pleaser. The cost of replacing tile and formica countertops, or replacing with a granite or quartz upgrade, is very costly and consumes a large amount of time on vacancy. Save the pain and try refinishing! There are many companies out there that can refinish virtually any surface with a high quality, high durability finish. They can be made to look like any stone product and can be easily repaired if ever damaged. The cost of a professional refinish in my market can often be less than the cost of even replacing formica, and it makes a huge difference!
I hope that some of these ideas may be helpful to you, and wish you the best in your vacancy adventures! Improving and turning property over can be one of the most fulfilling parts of property management in my opinion, because we get to not only improve large investments for our owner clients, but also provide a high-quality place to live for our residents. Improving the properties that we manage also improves the communities that we live in and I think that’s something to take pride in, so go have some fun with it!
- Andrew Johnson RMP®
- Johnson Property Management, LLC