The Cost Of A Minneapolis Duplex Vacancy
I’ve got my first vacancy in a long time in a triplex I own.
The tenant wasn’t destructive. She and her young family just really lived in the unit.
Having been used to 100% occupancy, I have to confess: I’m a bit shocked at the cost of a turnover.
There’s the cost of painting. And cleaning. And buffing the hardwood floors. There’s the plumbing fixture upgrades she did that will contemporary, don’t match anything else in the property, and the missing grout in the shower. And the list goes on.
By some estimates, the cost of a tenant leaving can range from $1000 to $5000. Personally, I think that’s low.
In addition to the repairs and lost rent during the vacancy, there’s the cost of marketing, lost time of meeting prospective tenants at the property, and screening fees.
Of course, I could turn some of this over to a leasing agent if I chose. In that case, I’d have to pay a fee for them finding the tenant.
While it isn’t the case here, many tenants move when rent becomes too high for them to afford. To avoid this, many long-term housing providers just don’t raise rent. Sometimes for years.
Yes, another $50 to $100 or more a month is important. However, even at $100 a month it would take 50 months (just over 4 years) to offset the cost of a $5000 turnover. So I get it.
Landlords should raise rent to keep pace with inflation. Sometimes, however, it may be wise to stay just below whatever the housing provider down the street is charging.
No tenant wants to get their friends to help them move only to end up paying more.