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Mind the gap

Wednesday, 8th May 2013

for rent

Every investor will inevitably find themselves in a situation where their tenant is vacating for one reason or another. In a perfect world, you would have one tenant move out and another move in on the same day, thereby minimising the “changeover time” when no rent is paid. But this is rarely possible and for good reason.

It’s far more natural for there to be a few days, before a new tenant can occupy the property. For starters, it’s extremely rare that the new tenant’s timetable will be perfectly aligned with the needs of the landlord, given that there is often a notice period that needs to be served with the previous landlord. Sometimes it may just be a slow market or the need to undertake work on the property that extends the changeover time.

While every landlord wants to minimise the changeover time between tenants, there are important processes that need to be followed, which take time. So, what does a property manager do when a tenant vacates? There are many things.

One of the main goals at the end of a tenancy is to make sure the property is adequately cleaned by the vacating tenant and prepared in a suitable condition for the new tenant. This involves conducting the final inspection. The final inspection will enable the property manager to evaluate the condition of the property according to the Property Condition Report (PCR) created at the start of the tenancy.

The property manager will look out for any excessive wear and tear and any areas inside or outside the property that require further cleaning or tidying. The property manager will also make sure that nothing has been wrongly removed or added to property, the correct keys are returned and that items such as appliances are in good working order.

In some cases, the outgoing tenant may have to go back to property and address the issues that were uncovered during the final inspection. After this has occurred, the property will then need a reinspection by the property manager.

When everything has been completed to the satisfaction of the property manager, the bond can be finalised and the appropriate amount returned to the tenant. At this point, an updated PCR can be created for the new tenancy.

While the changeover time allows for key processes to take place, it also provides an opportunity for the landlord to conduct any maintenance or repairs that may be necessary or desired. Some jobs are better done when the property is vacant, especially things like flooring and painting.

Although vacancy periods cost landlords money in terms of lost rent, it’s easy to justify a brief changeover time when you consider the important processes that need to be followed. These processes are ultimately in the interest of the landlord and the long term success of the investment.