Tenant Move-Out

How to Handle the Turnover

Tenant move-outs are a pain point for investors; income slows, expenses rise, and operations are interrupted. However, planning for a move-out can reduce its impact, and even offer an opportunity to improve the unit’s future performance.

Move-outs are much simpler with careful preparation

The state of Michigan sets a strict timeline for each phase of move-out, determined by financial milestones such as the release of the security deposit.

The information gathered during each move-out stage gives investors an idea of the duration, cost, and effort required to find the unit’s next tenant. Parc Management will guide you through the process and what to look for so that you can be ready for whatever comes next.

Written Notice

The first step in the move-out process is to obtain a written Notice to Vacate from the tenant. Tenants may feel comfortable offering notice in person or over the phone; however, it is essential to receive a written notice from your tenant. This clearly documents the start of the move-out to prevent future issues.

Parc Management streamlines the process of notice submission via our tenant portal. This allows residents to easily complete their Notice to Vacate in the same place they pay rent and submit work orders.

An email or text may qualify as Notice to Vacate; however, it is important that this communication contains all the details required for a valid notice. Our tenant portal checks for these details; 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 before vacancy. Advertising early can help reduce the time a unit is vacant, but the process is not as simple as marketing a property for the first time.

Most units will need some repair in preparation for new tenants. This means that old photographs taken prior to the current tenant’s stay may not accurately reflect the property. Similarly, the last listing made for the property may no longer be valid. Some landlords may eagerly schedule property viewings prior to tenant move-out; unfortunately, these viewings can create friction with the current resident and make a poor impression on the potential tenant.

Parc Management schedules photography, listing, and showing activities sequentially for minimal downtime between move-out, marketing, and new tenant move-in. 

For the best understanding of a property’s status, we recommend reviewing the move-in inspection and, if possible, completing a walkthrough of the unit with the tenant before move-out. This allows the owner and tenant to address any issues, security deposit deductions, or repair charges together.

A brief walkthrough allows investors to prepare for whatever repairs or maintenance items might be necessary. It is also an opportunity to take updated photographs and write a fresh listing for a more positive marketing experience.

Security and Final Inspection

The third step occurs after the resident leaves for the last time. Immediately after their departure, access to the unit is secured by changing locks and entry codes. Parc Management recommends the Kwikset SmartKey system for physical security, as the hardware can be rekeyed to a new physical key for less cost than replacing entire locks. Depending on the property, we also recommend removing the HVAC system and any appliances you purchased for offsite storage.

One of the final steps of the move-out process is the unit inspection. A final inspection assesses the property completely, comparing it to details documented during the move-in inspection. This helps determine what normal maintenance needs attention, and what repairs might be necessary due to tenant misuse. Once the inspection is complete, you can move on to the final unit budget and determine any residual tenant charges. We'll discuss the details of a good move-out inspection in a later post.

Every timeline varies, but some important milestones to remember are:

1. Tenant forwarding address - all tenants are required to provide their forwarding address within four days of their last day in the property

   
   

2. Inspection, disposition, and release of security deposit - Landlords and investors have 30 days from tenant move-out to address accounting items. Make sure you know the location and amount of the unit’s security deposit ahead of move-out to simplify this process

   
   

3. Vacancy time - ideally, a new tenant move-in could take as little as 14 days. Realistically, multiple factors affect the time before a vacancy is filled. A 30-day vacancy period is, depending on the time of year, a reasonable expectation. Successful owners are patient and prepare reserve funds to offset vacancy expenses

A tenant move-out means most investors experience unexpected expenses and periods without income. But for the prepared, a move-out can 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.

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