Tenant Move-Out
- Alan Robson
- 2 days ago
- 4 min read
How to Handle the Turnover
Tenant move-outs are a pain point for investors as income slows and expenses rise. When planned carefully and responded to quickly, a move-out can have minimal impact, and even offer an opportunity to optimize the unit’s positioning. Parc Management will walk you through the process of tenant move-outs so that you can be prepared for the future of your property.
The process of moving a tenant out is the same, regardless of the cause of their lease termination. In the state of Michigan, there are strict regulations on the timeline of each move-out phase, largely related to the tenant’s disposition (any charges or credits to the tenant), and the release of the security deposit. The data gathered during this time can give investors an idea of the duration, cost, and intensity of their unit’s turnover.
We'll guide you through the move-out process, discuss what insight can be gained during the period, and discuss some of the laws relevant to your property.
Written Notice
The first step in the move-out process is to retrieve written Notice to Vacate from the tenant. When relationships between tenants and landlords are good, tenants may feel comfortable offering notice in person or over the phone. While a verbal notice may be convenient, it is essential to receive a written notice. This serves as verifiable documentation of notice to help prevent future issues.
Parc Management streamlines the process of notice submission via tenant portal. This allows residents to easily complete their Notice to Vacate in the same place they pay rent and submit work orders. A tenant submission via email or text may suffice, however; it is important that this communication contains all the details required for a valid notice. Our tenant portal checks for these details, but specialized software can also be used to verify a correctly completed notice.
"A written notice is essential"
Essential details to record at the point of notice are:
Notice date (when the decision was made to not continue the lease)
Move out date (when residents must return possession of the unit)
Forwarding address (where residents will live next)
Reason for vacating
Walkthrough and Marketing
The second step is to prepare the unit for marketing, even before the tenant moves out. Early promotion can help offset vacancy and improve income, but the process is not as simple as marketing the unit for the first time.
Most units will need some repair or improvement in preparation for new tenants. This means that old photographs taken before vacating the current tenant may not accurately reflect the property. Additionally, arranging showings prior to tenant move-out can create friction and leave a poor impression of the space. Parc Management schedules photography, listing, and showing activities sequentially for minimal downtime between move-out, marketing, and new tenant move-in.
For the greatest clarity of a property’s status, we recommend reviewing the move-in inspection and any documented details of the unit prior to its most recent tenant. Depending on the relationship with the tenant, we also advise completing a walkthrough of the unit with the tenant before move-out. This allows communication of any issues or potential tenant charges so that residents are aware of what is expected. The review and walkthrough stages allow investors to make preparations for common issues or maintenance items that might need to be addressed. Updated photographs can then be taken, and showings can be scheduled for a more positive marketing experience.
Security and Final Inspection
The third step occurs directly after the resident releases possession of the premises. Once they leave, access to the unit is secured by changing locks and entry codes. We recommend the Kwikset Smartkey system for physical security, as the hardware can be rekeyed to a new physical key for less cost than replacing one or more locks. Depending on the property, we also recommend removing any appliances that you purchased and the HVAC system, storing them offsite for further safety.
One of the final onsite steps of the move-out process is inspection of the unit. A documented inspection assesses the property completely, primarily focusing on aspects documented during the move-in inspection. Comparing the move-in to the move-out inspection helps determine what normal maintenance needs to be addressed, and what might require repair due to tenant misuse. Once the inspection is complete, you can move on to the unit turnover budget and determine the tenant disposition charge. We'll discuss the move-out inspection in a different post.
Every timeline varies, but some important dates during this window are:
Tenant forwarding address - all tenants are required to provide their forwarding address within four days of their last day in the property. If they don't, they are subject to forfeiture of their security deposit
Inspection, disposition, and release of security deposit - Landlords and investors have 30 days from the date they move out to address tenant accounting items. Make sure you know the location and amount of your unit’s security deposit ahead of move-out to ease this process
Vacancy time - ideally, unit turnover could take as little as 14 days. Realistically, multiple factors affect vacancies and new tenant move-ins. A 30 day vacancy period is, depending on the time of year, a reasonable success. Successfully owners are patient, use the vacancy time wisely, and prepare reserve funds for holding costs to reduce financial strain.
Initially, a tenant move-out may appear as a headache. Investors may experience unexpected expenses, unprepared for a period without income. But for the prepared, a move-out can also be an opportunity. A new tenant means a new market rate for rent, the option to improve the property for more equity or a higher rent, and the chance to find a long-term tenant. If you’re looking to make the most of a tenant move-out, Parc Management is here to help. Contact our team here.