Move outs are a normal part of owning rental properties and should be expected and budgeted for. The key is understanding the costs and having systems in place to minimize them. Most investors dramatically underestimate the cost of a move out. In reality, move outs are one of the biggest expenses rental owners face.

Loss of rent and a number of expenses make up move out costs:

Lost rent
Vacant property expenses
Make ready costs
Deferred maintenance expenses and upgrades
Leasing charges

I will go through each of these and explain how to budget and reduce costs.

LOST RENT

Time in money! The faster you can get your property rerented the less rental income you lose. It starts before the current resident has vacated the property. Determine the condition before the current resident has vacated. You can do this with a pre-move out walk through or through ongoing property walk throughs. This allows you to determine if it will be a quick turnover or if larger items will need addressed. A quick turnover could be completed in as quickly as 7 days. Large renovations can take as long as 45 days.

For example, if your property rents for $1,200 per month and it sits vacant for 30 days, you have already lost $1,200 in income before paying a single expense. Three months of vacancy and you have lost $3,600!

VACANT PROPERTY EXPENSES

During vacancy, the property still has expenses. You must keep the utilities on, maintain the lawn, and in the winter ensure the property is properly heated to prevent damage. These costs may seem small individually, but they can easily reach $200-$300 per month. In the winter, expect to pay more. Again, moving quickly and reducing the number of days your property is vacant is crucial in keeping these costs under control.

MAKE READY COSTS

Hopefully the resident security deposit will cover the resident caused damages and responsibilities. If it doesn’t, you must collect the difference from the resident. Not only days this take time, but it can also be a challenge to do quickly. Typical make ready costs include:

Cleaning
Paint
Flooring
Yard cleanup

These items can add up quickly and even after a security deposit is applied, you could be left with significant expenses to get the property ready to rent.

DEFERRED MAINTENANCE & UPGRADES

The condition of the property before the resident moved in often has a major impact on move out costs. Older flooring, worn paint, and aging fixtures are more likely to need replacement between residents.

We frequently find maintenance items that have been developing for months but only become apparent once the property is vacant. Resident often fail to report items such as:

Slow leaks
Minor plumbing issues
Overgrown shrubs and trees
Exterior damage
Small roof leaks

One of the biggest mistakes investors make is assuming that because a resident tolerated an outdated feature, the next resident will too.

Investors should resist the temptation to simply “patch things up” to save money. Sometimes investing a little more during a turnover leads to higher rents, better residents, and lower turnover in the future.

Every property owner should have a general idea of the life remaining on these items and budget for replacement accordingly. The amount you spend at these stages greatly depends on the condition of the property.

LEASING CHARGES

If you use a professional property management company, they typically charge a fee to market and show the property, screen prospects, create the lease paperwork and move a new resident into the property. The property management company charges a LEASING FEE for this service. Leasing fees can vary by company, but many professional property management companies charge around one month’s rent to market and show the property, screen prospects, create the lease paperwork and move a new resident into the property.

THE CHEAPEST MOVE OUT ISN’T THE ONE WHERE YOU SPEND THE LEAST MONEY.

It’s the one where you keep a great resident for years, maintain the property proactively, and avoid costly surprises when they eventually move on.

In rental property investing, resident retention isn’t just a leasing metric, its one of the biggest drivers of long-term profitability.

The goal isn’t minimizing move out costs. The goal is:

Attract better residents
Maintain the property well
Renew good residents
Keep turnover low

One of the biggest differences between average and exceptional rental portfolios is how owners think about turnover.

Average investors treat move outs as an unavoidable inconvenience.

The best investors treat turnover as one of the most important metrics in their business. They focus on resident experience, proactive maintenance, and strategic improvements that keep good resident longer and reduce surprises when they eventually move out.

Because in rental property investing, keeping a great resident is almost always less expensive than finding a new one.