When I mentioned writing an article on Surviving the Turn, most of you would think about how to handle a major life crisis, a transformation, or even an apocalyptic event. Unless, of course, you work in property management like I do. Surviving the Turn means something very different to most people than it does to 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 through existing renewal clauses or deciding how not to renew the lease. Either way, everyone who has any involvement in rental units in some way has to do it.
Who makes the move
It doesn’t matter if you’re the tenant or the property manager; usually, either party can end the lease or initiate the renewal agreement. Most of the time, after 12 months, it’s a fairly automatic situation—either another 12-month lease can be arranged 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.
Is there a renewal clause?
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 renewing the lease. However, not only should it set the terms for the expiration of the existing lease; it should also leave the door open for changes.
This is usually based on “market rent” at the 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 says rent won’t be lower than the maximum monthly rent during the initial terms of the lease. That way, there’s no room to go lower, but a possibility 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 not. First, shoot them a memo letting them know three months prior to renewal time. Studies have shown that people start to consider a move 45 days prior to their actual departure date. 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.
Option to renew or end the lease
It’s important to consider also, that you will have tenants you want to renew and unfortunately, 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 contain a simple statement like this:
“Your lease with us expires on (date 60 days in the future) and will not be renewed. Please vacate the premises by midnight on (date 60 days in the future).”
For those you wish to renew, a short little note like this will suffice:
“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.”
(*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.)
Student Housing: An Entirely Different Ball Game
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 50 apartments top to bottom, inspect them, and take new tenants in the span of about a week or two. 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 the last ones 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 means not only do you have to deal with cleaning and inspections, but also 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.
The Benefit of Quarterly Inspections
Quarterly inspections in student housing offer valuable advantages for both landlords and tenants. These regular assessments help maintain the property’s overall condition, ensuring a safe and comfortable living environment for students.
By identifying maintenance issues early on, landlords can address them promptly, preventing costly repairs down the line. Inspections also reinforce lease compliance, discouraging unauthorized occupants or disruptive behavior. This proactive approach fosters open communication between landlords and tenants, allowing for conflict resolution and early detection of damages or wear and tear.
With legal compliance in mind, quarterly inspections serve as a crucial tool to uphold safety standards, harmonious living, and the well-being of all involved in the student housing community. Additionally, move-in and move-out reports are critical in providing a seamless rental experience.
Experts in college housing report that quarterly inspections have greatly reduced the amount of repairs that have to happen during the otherwise somewhat insane turnover season. They also recommend starting your turn over process about six months prior to the turn.
The Benefit of Pre-Leasing
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, you might want to consider longer lease terms, like 16-month leasing, to space out the turnover and smooth the transition further.
Pre-leasing in student housing offers numerous advantages for both students and property owners. By allowing students to secure their accommodations well in advance, pre-leasing ensures they have access to a wide range of housing options and can select their preferred residence without the stress of last-minute searches.
For property owners, pre-leasing minimizes vacancies and provides a steady rental income stream. It also allows landlords to plan property maintenance and improvements ahead of time, ensuring that the units are in optimal condition for new tenants. Additionally, pre-leasing helps property owners gauge demand and make informed decisions regarding rental rates and lease terms.
Overall, pre-leasing streamlines the rental process, benefits both parties, and contributes to a smoother and more organized student housing experience.