I've had 3 turn overs for single family homes. I'll admit that I like my rentals nice and clean.

#1 $4200 - $2200 was fencing and $1000 was mulch and yard work the rest miscellaneous repairs

#2 $8731 - less $1500 security deposit since their dogs ate the porch railings and chewed up the siding of the house so lets call it $7200. $3200 was full inside paint, partially rebuilding a deck and deck stairs, mulch and yard work.

#3 $6620 - $2000 removed carpet and installed LVP, $2400 was replacing all the polybutyl pipes in the house, mulch and yard work, fence repairs, electrical short to outside shed

I just did this for my own edification but I am sure a couple of you overspend at turnovers so I didn't want you to think you were alone in your madness.

Currently running 60% expenses and 40% profit but Property taxes are due in July / August so that will change it to

70% expenses and 30% profit.

Then by end of year probably 65% expenses and 35% profit.

So it is early in the morning here and I am paying bills and Murder Mittens is distracting me. This 4-5 month old kitten is so amazingly hilarious and so absolutely annoying. i can't help but laugh when she is attacking my feet at 3 in the morning. She is currently alternating between chewing on my computer cords and pouncing and clawing my arm.

Excellent use of data. I wouldn't be that concerned because we have earned our gray hair. With it comes experience. When profit margins slid closer to 20%, the weak and inexperienced folks start to feel the squeeze the market creates.

Those turn-over numbers are not the result of tenants, with the exception of #2.

I have only the one apartment empty that I am working on. I could have done a deep clean and possibly turned it pretty quick. But I feel that it needed updating, so I am redoing basically everything.

In doing this I am also adding things that I feel have value. Tile backsplash and behind the oven. New flooring. I even got rid of the old fridge because I thought it was looking too aged.

Just found out that the shower controls need either rebuilt or replaced. Adding that as well.

I try and keep turn over and rehab separate. Helps to keep me sane(r).

I screen my applicants so my average stay/tenancy runs between 5 to 7 years. My turnover costs: Vacancy 1 month to do repairs and re-rent.

Interior painting. New Mini-Blinds (they never hold up too cheep)

A feature upgrade to attract a new tenant.

It is so difficult to determine Capitalization expenses vs repair expenses. If you are going to add capital expenses, then you have to amortize it....but what goes where isn't always clear.

My CPA gave me this guidance.

The longer the term of the previous tenant, the higher the turnover costs. Which is why I really don't like long-term tenants. 2 years is perfect, 3 is okay if they are great, 4 and we are starting to enter refurb zone, 5 and it's a project.

#1 Wear & Tear even from the most perfect tenant

#2 Attitude over time degrades along with paint - familiarity breeds contempt. :/ which is why our Deposits are so high. Keeps people civil and cooperative :)

WMH, I get the short term theory. I think a little longer is better for me.

I have one guy that has been with us 21 years. Bachelor. His place shows it. I let people get away with more then than I do now. His will be a full blown rehab.

As I get places I am bringing them up to this century. I did just have a lady move out and I turned it same day. We were waiting on her to leave for a while tho. Couple things that she missed, but otherwise a decent turn.

But I would still rather keep the place rented for more time. How long? I have no idea just yet. I know I do not plan to change colors within a few years. The new places have LVP or Laminate in place of sheet vinyl or 1x1 glue downs. Should last a while.

I still use carpet and I have been getting a better grade. That with good pad seems to allow it to last longer as well.

Not a competitor for the turnover crown either. I do not show places while they are filled, unless the tenant is a pain, then I do it more to be a pain back.

So for me I know that I won't be changing the decor a lot within the two year mark. Probably not within a five year mark if I updated before the tenant moved in. I am not a fast trend follower.

Bonanza,

Add in the lost rents.

YEARS ago the national survey came up with $3100 avergae turnover cost which was basically lost, rent, advertising, cleaning, maybe some painting but not upgrades.

I'm big on upgrading SOMETHING at every turnover. I want my places up to date and desirable. It's also easier to do a few small things each time so I don't get hit with a big rehab all at once.

Especially exterior stuff so if it comes open in the dead of winter it will look OK.

I want them to stay FOREVER! Each turnover is an expense of my money and my FREEDOM!!! Fewer turnovers lets me keep more money and more FREEDOM!!!

When I did all the work myself I took a lot of pride in being the guy in Lowes with the big ring of keys and could master a turnover.

THEN I realized 2 things:

-even the good people would leave a mess with the phrase "Just use my deposit." Seldom did folks make extra effort to TRY to get their deposit back. In a study of 100 move outs I only returned 3 deposits.

They saw the deposit as THEIR "get out of cleaning" card.

-Clean people leave a clean house even without a deposit. As you heard me teach at Convention I have not taken a DEPOSIT on the last 1000 new leases. SELDOM any clean up work at a turnover.

BRAD

PS I pay flat rate $100 labor per room for painting walls, ceiling, trim. $20 extra for closets.

I supply the paint.

Zero, it's not always the tenant's fault of course - but it's hard to fix a potentially serious issue with a tenant in place sometimes. It's only at turnover that we find certain things that they didn't even know about.

Here's a funny one: we just found a water heater at one place from 1992!!!! How in holy heck did we miss that over the past several tenants? It was only when Son#3 did "Annual Inspection" (for the first time) and reported back that he couldn't find the water heater at all that we realized it was encased in a wall and we'd never bother to look for it somehow. Through I think three or four long term tenants! And it was still working so hey - they had hot water.

WMH that reminded me of issue in hall at our mobile home we remodeled. As they were about finishing up, they turned on the water heater, and water started spewing out! We had wondered why the floor gave way in hall outside of bathroom door? Come to find out, the water heater had been bad for who knows how long, and they did without hot water unless they turned it on and then it leaked the whole time until they got done and turned it off!! What a way to live!!?? Home was too bad to allow landlord to come do repairs.

Big problems come along and must be dealt with. I can't include those as issues at turnover.

With regards to the water heater, I hope that you get the mileage out of your new one. The phrase they don't make em like they used to comes to mind.

My dad put his water heater in the attic, covered in fiberglass batts. It has been there for maybe 18 years (?) with no issue.

He did not put it in a pan. He has never replaced an element. When it goes his bathroom and kitchen ceilings are toast.

Brad, your $100/room rate would never fly in our area where everyone is a painter and everyone thinks they are an expert and everyone thinks they are worth $30/hour.

Remember reading a Tax Court case where a rental had a roof leak from a storm and the LL replaced the roof - Tax Court ruled that it was a repair since it was caused by an emergency and was not a planned repair. Google search: "Tax court rulings have established that roof replacements for rental properties can be fully deducted in the year they are made if the primary purpose is to keep the property in operating condition and prevent leaks, rather than to increase value or prolong life. "

I thought the BBB allowed these repairs to be used in the first year now anyhow.