Tenant Turnover: How to Prepare Your Property for a New Resident

Announcer:

Welcome to Canada's Property Management Podcast, your number one resource for investing, managing, and maximizing the value of your real estate assets. And now here's your hosts, Carla Browne and Adrian Schulz, Canada's rental property experts.

Carla Browne:

Okay. Today, we are talking about tenant turnover and how to prepare your property for a new resident. So Adrian, let's dive into this one because this is one that most landlords really struggle with, and I'm going to say most of them get it wrong. So let's really talk about this and give some good points today on how landlords can really improve this process. What are you finding, I guess, are some of the key points that a landlord really needs to look at when we hit this tenant turnover part or even before the tenant turnover part, I guess?

Adrian Schulz:

Well, I think that the key part to tenant turnover is planning, right? And I think that if you're an experienced rental owner, investor, if you're an experienced property manager, we've all had challenges planning this correctly, so that you can in fact maximize your revenue and not have any downtime. I think there's some people in the industry that would argue that unit turnover or a make-ready should in fact happen in a 24 hour cycle. Now to put our minds around that, right? If tenant moves out today at noon, by tomorrow at noon, we should be able to move in a new tenant. So how do we achieve that? Where do you start?

Carla Browne:

I think that it's going to round out, and this is something that you and I always talk about, and that is that communication, is that we need to set the plan way before move out time. And I think you're a big believer in this one as well. So let's talk through that. So tenants moving in, are you already approaching the move out at that point? Or where are you introducing what's going to happen at the end of this lease term?

Adrian Schulz:

Yeah. So the irony is that the move out package, that communication piece on how it works, what they have to do, what we do is actually laid out on move in day. It's part of the package when they're moving into the unit. And that way, by the time that a resident decides, "I'm staying or I'm going," if they're going, now the workflows trigger for us as managers or as investors on what we do next. So that's just being very specific in the communication process when they're moving in, how they would go about moving out. And once we've been notified that a resident is in fact not renewing, immediately we must schedule that inspection, the walkthrough of that unit to determine what needs to be done to the unit to make it ready for the next resident. And I think a lot of us have made the mistake to wait until move out day to do that inspection. And that puts you basically into panic or into crisis mode because it's now too late to plan, right?

Carla Browne:

Yeah.

Adrian Schulz:

Yeah. So the walkthrough inspection must be scheduled almost simultaneously when you find out that the resident is in fact not renewing.

Carla Browne:

Yeah. We phrase it as a pre-move out inspection. So we still have to do that actual move out once the tenant leaves. But we offer them and we make it sound like it is a benefit to the tenant that let us walkthrough the property now that we know that you're moving out. And we can point out all the things that are going to need to be corrected because you may have forgotten about that piece that we put in your move in package, that we want to make sure you can get the bulk of your security deposit back. Because in most provinces, there is a security deposit that is being held in the property. So we really try to flip it.

Carla Browne:

It is definitely about us. We want to make sure the property is rent ready when we try to turn, but we flip it back to the tenant and say, "Let us help you here." And then they're more apt to go through that walkthrough with us. So very similar in the approach, I think, that you're taking there. So what about cleaning? This is a big one that I see because there are so many levels of cleaning. Who would've thought that cleaning is such a wide spectrum of what is actually clean and what isn't? What do you do there? What kind of suggestions can you offer?

Adrian Schulz:

Carla, can we go back to your childhood for a moment? Did your parents teach you how to clean a home?

Carla Browne:

Mine did. Saturday was cleaning day. I was on my hands and knees cleaning baseboards in my house as a child. But I will tell you that that doesn't happen all the time. And I sometimes refer, don't take offense to this Adrian, promise you're not going to be offended when I say this.

Adrian Schulz:

I promise.

Carla Browne:

But I often say, "That looks like it's boy clean." I use that phrase sometimes.

Adrian Schulz:

Well, I have to tell you the story, and I hope I don't offend anyone by telling the story. This morning, my wife and I are talking about the cleanliness of the house. And unfortunately, we recently lost our cleaning lady. She can't work her full-time job and be a cleaner. So we asked our nanny to temporarily pitch in with trying to keep the house clean whilst we seek out a new cleaning lady. And we, within two weeks, have realized that clearly, and we love our nanny, she's part of our family, but clearly her skillset or strength is not cleaning. Right? And I jokingly said to my wife, "I think the days are gone when people are taught how to clean a home during their childhood." I also was taught. And I probably am very much a victim of boy clean because I for sure would do the boy clean type of cleaning. But the fact is we were taught.

Adrian Schulz:

So let's talk about teaching. One of the easiest things that we can do in that pre-move out inspection is to give the resident a list of the things that need to be cleaned and how to clean them, right? Your kitchen cupboards must be dusted and wiped with a damp cloth and dried, right? That's a sentence or two. Most people will understand that. So if we can break down area by area what needs to be cleaned and how on the back page of that initial pre-move out inspection report, I think it really helps people. And then the other attachment I would add to that is any items that are not cleaned or any items that require repair, an approximate cost of what it costs to have that done if you don't do it yourself. And it's amazing how fast people learn to clean and fix things themselves, putting that light bulb back into the oven, right? If you spell out the potential costs, if it's not done upon move out.

Carla Browne:

Absolutely. And just not to dwell on the cleaning part, but I will tell you that I did not hire a cleaner until after both of my children moved out. For that specific reason is that it was really important for me to be able to make sure that my kids knew how to clean. And I think it was just being part of this industry and seeing that really, people are not taught that day-to-day, which going back to when I was a child, I think it was a little bit more normal. I mean, cleaners, they weren't something that everybody had. And now they definitely are. And I thank mine every two weeks when she comes to my house. So I'm very thankful to have her now, but that's a big one.

Carla Browne:

We also offer to give the company cleaner that we use. We give their name and number to our tenants a lot because we do say, "Sometimes it's easier that you don't have to worry about this. It's not an incredible high cost to have them come in. And the great thing is, is they know the standard of clean that we're looking for." So they're guaranteed if they use our cleaner, that they are not going to have a cleaning bill attached to that move out. So that's another thing that we do, and they get a better rate. They give us just the rate because of the volume that we're sending them. Okay. Cleaning. It's clean.

Adrian Schulz:

Just wait. Can I get your cleaner's phone number? Wrong province, I know.

Carla Browne:

They're going to travel. But yeah, they are great. Changing of the lock. This is one where I also, I think, a lot of landlords don't understand the importance of what this could mean in taking care of the tenants. And there's a few ways that we can do this as well, which make it very cost-effective. But do you want to just talk a little bit about the importance that you feel changing of locks has?

Adrian Schulz:

Yeah. Well, I think really, it's security for the new resident, it's security for the investor of the property, and it's security for the property manager, right? We know that going forward for that new resident, that they are the only outsiders that have a key to their suite. And we know from an investor or a property manager's perspective that our resident is in fact safe in their home because we've gone ahead and changed those locks for, in the grand scheme of things, a very low investment or cost knowing that our residents and our asset itself is safe.

Carla Browne:

Absolutely. So we've gone through, your key points are be specific, get those inspections scheduled, the cleaning aspect, the changing of the locks. Anything else that you might want to add before we wrap this one up?

Adrian Schulz:

I think we said it at the beginning, to start early and to plan out the actual process in advance, so that we're not doing it on move out day.

Carla Browne:

Excellent. Now that's real property management.

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