When you find out your tenant is moving one of the first things you start thinking about is how to minimize the vacancy period.
Every day vacant is lost income so the goal is find your next tenant ASAP.
Some landlords think that if they show the unit while it’s occupied, they can start working on the application and approve the prospect before the current tenant leaves. Genius right? Think again.
On the surface, this makes sense, but in reality, it’s a lot more complicated.
For context, Sleep Sound has leased thousands of units over 18 years and for a 7 year period we even showed occupied property.
We came to learn that showing occupied units threatens the long term success of the tenancy and didn’t deliver the advantages we anticipated.
This is because of 3 key reasons.
First Impressions
First impressions matter. When you have a tenant on their way out, their priorities are not your priorities, not to mention, they are in moving mode. This means they’ve got boxes in various places, some decor up, some decor down, piles of miscellaneous stuff, etc.
When you show a property like this, you are asking your prospect to not only look past the clutter and imagine how the property could be, but you are also asking them to ignore their intuition, their emotional experience at the property, which often tells them they didn’t love the space (they may not even know why).
This impression is further reinforced by the next tours where the units are clean, feel spacious, and inviting.
Sound Advice: Most prospects will tell you they can overlook the clutter, etc. They just want to see the property. In reality, they can’t and unlike the process of selling a home, prospects rarely re-tour a rental.
Tour Availability
When a property is occupied you can’t just show it anytime you want.
You have to coordinate tours with the tenant. This makes touring difficult and results in lost leads.
This drives up time on the market and creates the perception that the property is less desirable, even though this may not be accurate.
This can lead to price reductions and/or concessions. More lost money.
Sound Advice: Some landlords think it’s a good idea to work out a deal with their tenant to show the property for them. That is a safety issue and a bad idea. Don’t do it.
Delivery
In a perfect world everything would go according to plan. Unfortunately, that’s not how the real world works.
When an applicant applies and is approved, the first thing they want to know is when can they move-in?
This is when things get risky.
A move-in date isn’t just a day on the calendar, your new tenant is likely taking time off work, hiring movers or renting a moving truck, and may be even coordinating with friends and family for the big day. These are not plans that are easy to move or undo should the move-in date need to change.
Why would the move-in date need to change?
The departing tenant stays past their move-out date.
Vendor delays e.g. short staffed.
The important part is the back order.
Underestimating the scope and scale of turnover
Unexpected weather events.
All of these situations threaten the move-in date or force you to let the tenant move-in even though the unit isn’t ready. This may sound harmless, but it will come back to haunt you.
Sound Advice: Never let a tenant move-in before the property is ready. It doesn’t matter what they say, they will remember that the unit wasn’t ready and this oversight will be used as justification for leniency in the future should the tenant not comply with the lease. This is especially problematic at the end of the tenancy when attempting to assess move-out charges for legitimate concerns.
Conclusion
Waiting to show a property until the tenant leaves will reduce everyone's stress and in reality, may actually save you money.
Note: This may not apply to multifamily properties where multiple units with similar layout’s and amenities may be available as alternatives.
