When your rental property is vacant you’re facing what we call the “triple threat”.
Mortgage cost
Turnover repairs
No rental income
With all of this money going out the door you may be tempted to turn off the utilities, or keep the heat low.
That is a major mistake and it could cost you everything.
Insurance Risk
Most, if not all insurance companies will deny coverage of a claim if the utilities are off.
That means if a pipe bursts and floods the entire property, insurance won’t be there to help you.
Losses due to water damage can range from $5,000 to $50,000+.
Some landlords caught in this situation have pushed owners into bankruptcy.
Mold Risk
When the heating system is off there is nothing to manage the temperature or relative humidity inside the property.
Under the wrong circumstances, it can create an environment where mold will thrive.
Mold growth can not only cause permanent damage or potential health issues, but this is another issue that insurance won’t cover if the utilities were off.
According to 1-800-Water Damage “The ideal humidity inside your home should be between 40% and 60%”.
Marketing Risk
First impressions matter. If someone walks into your home and it feels cold and unwelcoming, the prospect will be focused on how uncomfortable they are and not how much they love the property.
When they tour the next property on their list, if it’s cozy and warm, they won’t remember yours fondly.
People may not even realize why your property didn’t “feel” right. They will just move on.
Vacancy is not the time to try and save a few hundred dollars. It could cost you a tenant.
It’s Not Efficient
Sometimes landlords want to wait until there is a prospect tour before turning the heat on.
Not only is this not practical from a re-heating standpoint which can take 5-12 hours depending on the temperature, but in many cases it will cost you more money in the long run.
Sounds Advice: During Fall and Winter set your thermostat to at least 60F, preferably 65F.
Closing Thoughts
If you know you’re going to have an upcoming vacancy or currently do, don’t try to cut corners on utility cost. It could backfire and cost you much more in the long run. Instead, incorporate these costs into your budget if you know you’ll have an upcoming vacancy.
Sleep Sound Property Management, Inc. is a professional property management company that specializes in residential and multifamily property management and leasing in the Portland metro area, including Vancouver, Washington.
