When I mentioned writing an article on Surviving The Turn, most people had visions along these lines:
Or maybe even:
Unless, of course, those people worked in property management. Surviving the Turn means something very different to most people than it does us, doesn’t it?
Each and every year- whether you are a property manager, a landlord, or even a tenant, you have to deal with the end of the lease. This may be negotiating by way of existing renewal clauses, it may be having to decide how not to renew the lease: but everyone who has any involvement in rental units in some way has to do it.
It doesn’t matter if you’re the tenant or the property manager, usually, you can initiate the lease renewal agreement. Most of the time, after 12 months, it’s a fairly automatic situation: either another 12 month lease happens or, by the terms of the original contract, the agreement goes month to month. When things are going well, everyone’s happy to just extend the lease and continue on. No fuss, no muss. Just make sure you have everything organized before hand, and everything happens on time.
Your rights and obligations are different from state to state, particularly when there are issues of rent control at play, but generally there are a few things you can do to get through the turn without losing your marbles.
The first tip for survival may be one that you as a property manager or landlord has to enact in your new leases if you don’t already have it in your existing ones: make sure that renewal clause actually benefits you. A renewal clause should offer the tenant the option or a number of options for renewal of the lease. However, it should set terms for the expiration of the existing lease, but also, leave the door open for changes.
This is usually based on “market rent” at time of renewal, or just a predetermined number set by the property management. You should have something in there that protects you: for instance, a statement that rent won’t be lower than the maximum monthly rent during the initial terms of the lease: so, no room to wiggle lower, but room to wiggle higher as market conditions change. Also, do not exclude your renewal clause from the continued terms or else, you’ve just set yourself up for lease renewals in perpetuity.
So, assuming you’ve got that in place, you also probably have a specific time frame for your tenants to notify you that they will renew or they will not. First, three months prior to renewal time: shoot them a memo letting them know. Studies have shown that people start to consider a move 45 days prior to the actual date they’ll go- so, 60 days is a good time frame to remind them the turn is coming. Then another notice about 30 days, and the last one 7 days prior to the date.
It’s important to consider also, that you will have tenants you want to renew and unfortunately, sometimes, those you do not. If you don’t have a renewal clause, you’re really not under any obligation to do so. Say it’s about time for that 60 day notice- instead of sending them notice that the renewal is upon them, send them notice that you won’t be renewing. It should look something like this:
Date: right now
Tenant name(s) Mr. and Mrs. Bad Tenant but Not Bad Enough to Evict
Property Address ________________________Apt. __________
City _________________________Your lease with us expires on (date 60 days in the future) and your lease will not be renewed. Please vacate the premises by midnight on (date 60 days in the future).
For those you will renew, a short little note like this will suffice:
Date: right now
Tenant name(s): Mr. And Mrs. Tenants We Think Are Awesome
Property Address ________________________Apt. __________
City _________________________Your lease with us expires on (date 60 days in the future). Because we value you as a tenant, we would like for you to renew your lease for another 12 months. (Or however long the term.) The rental amount of (However much the rent is) will remain the same.
OR! If you need to change that rental amount, you would insert that here, referencing the requisite clause pertaining to said rate, deposit or terms change.
But the student housing turn is a whoooooole ‘nother animal
Of course, all of those issues with regular rental housing can be a headache- but it’s really nothing compared to having to clean about 500 apartments top to bottom, inspect them, and take new tenants in: in the span of about a week. Top it off, this is the college crowd, and as such: those units can be extremely problematic after the fact.
Being as it is August, most of the turn issues in college housing have been dealt with: so, it should be quite fresh in your mind the horrors you encountered. So, how do you avoid these? There are a few ways you can make sure that the next turn doesn’t turn out quite the headache this last one did: but it’s again going to require great organization and a lot of communication.
According to Multihousing News – roughly 60% of the student units turned over at the end of July, which meant not only do you have to deal with cleaning and inspections: but then piggybacking on that? You have to deal with getting almost the same amount of moves coordinated in early August.
Conventional multihousing may have a small rush here and there, but it’s really not quite like the volume seen in student housing. This often involves having to hire outside vendors to do the cleaning and maintenance and it also means that when that cost is concentrated: your bottom line can suffer. The potential for mistakes and hiring the wrong crew becomes a major liability when you try to smash it all in towards the end of the term- rather than vetting a great team early on.
Additionally, move out reports are critical, as are year ’round, scheduled inspections. Miles Orth of Campus Apartments Inc said in the report that quarterly inspections have greatly reduced the amount of repairs that have to happen during the otherwise somewhat insane turnover season. He also recommends starting your turn over process about 6 months prior to the turn.
Pre-leasing can also be a tremendous asset, as it gets the rooms already filled and you can then schedule your move ins accordingly and with less hassle ahead of time. This way, students realize if they’re moving into a furnished or unfurnished unit (It does happen.) and can also plan accordingly. Another thing to remember is, not all college students want or need to move at the end of the year: so, consider longer lease terms, like 16 month leasing, to space out the turnover and smooth the transition further.
