Is tenant turnover a good thing?
My college marketing teacher often answered questions with the reply, “it depends” which is an appropriate answer to this question. There are times when tenant turnover is beneficial to a landlord. Let’s evaluate when tenant turnover benefits the landlord.
BC Law allows owners to increase rent once every twelve months after the start of a tenancy and the increase is controlled by an amount approved by the government. These two factors limit the amount a landlord may increase rents at their properties. BC has strict limitations on when landlords may evict tenants. If a landlord uses a fixed term lease the landlord must occupy the property for six months after the tenant leaves, eliminating the landlord’s ability to re-rent the unit to another tenant at the end of a fixed term lease.
When a tenant chooses to vacate, provides notice to the landlord, the landlord has the right to re-rent the unit at market rents. When a tenant has occupied a property for multiple years, often the market rent will have increased during those times at a greater rate than the allowable amount under the tenancy laws. When a tenant has occupied a property for a long time, five or ten years the unit may be outdated compared to other properties in the market. Taking the time to upgrade the unit, with new flooring, kitchens, bathroom, appliances or fresh paint may provide an increase in the rental appeal for the property.
There are benefits for long term tenants who respect the property and always pay the rent on time, but turnover gives landlords the opportunity to increase rents and revenue of their rental property. There is no optimal time identified as good for tenant turnover though three years is perceived as a good timeframe for each tenancy. When your tenant provides notice after three years, view it as a positive opportunity for your rental property.
Need assistance managing your property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
