Surprising MAJOR Expense That Most New Investors Do NOT Account For...
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The video discusses the most expensive part of owning rental properties, which is turnover. Turnover occurs when a tenant leaves, and a new tenant needs to be found. During this period, the landlord is not collecting any rent but still has to pay expenses such as the mortgage, insurance, and taxes. On average, turnover costs around $2,000 to $3,000 every time a tenant moves out. To limit turnover and increase cash flow, landlords can follow five tips, including screening tenants thoroughly, offering incentives for lease renewals, maintaining the property regularly, responding to tenant requests promptly, and being flexible with lease terms.
The best way to reduce the cost of turnover is by limiting the number of times tenants move out. By having tenants stay for longer periods, landlords can save thousands of dollars in the long run. To achieve this, landlords should screen tenants thoroughly before approving them. This means taking the time to find the right tenant for the property and conducting background checks, credit checks, and contacting past landlords.
Landlords should communicate and set proper expectations with tenants throughout the entire pre-approval and approval process. This includes meeting with tenants at their current property to see how they are taking care of it and clearly stating lease expectations. Lastly, landlords should treat tenants with respect and avoid viewing them as just numbers on a spreadsheet. By treating tenants with respect, landlords can build a positive relationship with them and reduce the likelihood of conflicts arising.
In conclusion, landlords can limit turnover and increase cash flow by following the tips mentioned above. These actions may take more time and effort in the short term, but they can lead to long-term benefits such as attracting good tenants, reducing turnover costs, and increasing profits.
The video discusses the most expensive part of owning rental properties, which is turnover. Turnover