Real estate investments are fairly simple when you have tenants living in them. You still need to manage the maintenance but, for the most part, you just collect rent each month and make sure that everything is in good shape. However, when your tenants move out, things are a little more difficult.
You still have to pay the mortgage, so every month that the place is left unoccupied, you’re losing money. So, you need to get tenants back in as soon as possible, but there are other things that need to be handled too. Here’s how to manage your rental property between tenants and avoid losing money.
Assess Your Finances
There are a lot of hidden costs associated with real estate investments but it’s easy to forget this when tenants are covering them for you. When they move out, you need to assess your finances and see where you stand.
Add up the monthly mortgage payments as well as any taxes and insurance costs too. Factor in any maintenance that needs to be done. This will give you an idea of how much you are losing each month, so you can see how long you are able to keep things afloat before you absolutely need to find tenants or consider other options.
Streamline The Moving Out Process
The quicker the old tenants move out, the quicker you can get started on finding new ones. So, take care of the moving out process as quickly as possible. Have all inspections ready so that you can schedule them with your tenants before they leave.
Make sure to schedule maintenance work too so that it doesn’t pile up until you have a new tenant and make sure to collect security deposits from old tenants. While most states require a landlord to return a security deposit within a certain time frame, if a tenant disputes the amount of claims damages, this can hold things up for weeks or even months at a time.
You also need to think about this when writing the tenant’s agreement. Consider adding a clause about the amount of notice they need to give and extending it past the normal period. The longer you have to plan, the easier things will be.
Consider Temporary Vacation Lets
Using the property for vacation lets is a good way to plug the gaps and keep bringing in money while you find more permanent tenants. You can use short term rental furniture to improve the place and give it more of a vacation feel. It doesn’t take long to set yourself up on sites like Airbnb and find some tenants, as long as you’re in a good location. You can charge a very good rate for vacation lets so renting the place for a few weeks should cover your costs while you find more permanent tenants.
Deal With All Of The Maintenance Quickly
When you are showing people around the place, any maintenance issues will put them off. A lot of landlords make the mistake of thinking that they need to get tenants in right away, so they show the property as it is. The problem is, nobody wants to move in because it’s in poor condition. It’s much better to handle maintenance first so that the place looks nice and you can get tenants in quickly.
You should always have contractors on hand to get on with work immediately. As soon as you find out that the tenant is moving out, get in touch with your contractors right away and see what their schedule is like. That way, they can start work the same day that the tenant moves out and you can show people around shortly after.
Reconsider The Rent Price
If you have had tenants in the property for a few years, property values are likely to have changed. That means that your rent price needs to change too. If prices have gone up, you may be able to increase it a little. But if prices have gone down, you need to be realistic and take a reduction. You can still negotiate with tenants to try and get them to pay a slightly higher price, but you won’t get any viewings if your rent is far higher than the average in the area. So, check out some other properties and see what they are charging. You don’t have to match it exactly, but you do need to be competitive.
The period between tenants is often the biggest challenge for real estate investors. But if you follow these steps, you can avoid any big losses.
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)