7 Ways Landlords Can Avoid Losing Money on Move-Out Day

by | Dec 10, 2012 | Rental Property Management Tips

As tenants prepare to move out, landlords face some of the most common causes of income loss — even when the rest of the tenancy went well.

Miscommunication between landlord and tenant can lead to prolonged vacancies. Poorly executed moves or last minute damages can delay the new tenant’s move-in. Disgruntled tenants can hamper new tenant tours. Landlords may also encounter unexpected out-of-pocket  losses.  Any one of these missteps can place profits at risk.
To avoid end of tenancy income loss, consider these tips:

Know Where You Stand

Landlords need to know in advance whether the tenant is planning to stay on as the end of the lease term approaches. It never pays to wait until the last day to see what the tenant is going to do.

If the tenant decides to stay on, but does not sign a new lease, the tenancy typically defaults to month-to-month. While there’s a place for month-to-month tenancy, this type of arrangement can place landlords at a disadvantage.  For example, if local tenancy laws allow landlords to raise rent at the end of the lease term, the month-to-month lease may interfere with that right, or at the very least, may be a missed opportunity to raise rent.

Also, the termination notice required for a month-to-month lease may be less than for a regular term lease, and the tenant may decide to leave at a time that’s inconvenient for filling vacancies.

More importantly,  landlords need to know if they should be hunting for new tenants, and if the property is going to be available to the new tenant as promised. Otherwise, landlords lose income to a longer vacancy period, or a contract dispute with the new tenant.

Stay on Schedule

A smart landlord prepares for the move-out and the new tenant moving in a few weeks before the end of the lease, or as soon as they receive or give notice to end the lease.

The first step is to schedule a time to perform a final inspection to complete the move-out report. In the best circumstances, this will be the time that the landlord will secure the property once the current tenant surrenders possession.

Unless the property is a furnished rental, landlords must make sure the tenant realizes they will be charged for the costs and labor required to remove any tenant belongings left behind.

Dust off the move-in inspection list — hopefully, the tenant files are well organized and it will be easy to find the paperwork. Give the tenant a head start by sharing the form and a cleaning checklist so the tenant can properly plan the move. Offer to perform a preliminary move-out inspection and create a to-do list so the tenant has the best chance of getting back the full security deposit back.

Some landlords recommend preferred vendors like carpet cleaners who will offer tenants a price discount and guaranteed availability so the move-out stays on schedule. These vendors often will warrant the work they perform on the rental long after the tenant leaves.

Plan to use the move-in report as a guide, and walk through the property with the tenant, noting any damage. Have the tenant sign the move-out form.  If necessary, allow the tenant to note any objections on the form.  Creating a record is crucial for taking security deposit deductions — without it, a landlord risks losing income.

While it’s a small-ticket item, be certain the tenant leaves behind all of the keys, whatever they may be for — the lobby door, fitness room, pool, mailbox — to cut down on the expense of replacement.  Switching to password-sensitive keyless locks can also save money on move-out day.

Require the tenant’s forwarding address.  This is crucial for resolving security deposit disputes, and for collection should that need arise.

Security Deposits Can Cost Landlords

Never allow the tenant to apply the damage deposit to the last month’s rent.  That is a recipe for financial disaster for the landlord.
Even if everything appears undamaged, landlords should not be tempted to give back the security deposit until they’ve had time to thoroughly check the property.

Landlords must then return the deposit, or provide the necessary accounting, within the statutory period provided in the local tenancy laws.  Missing those deadlines can generate significant penalties and income loss for landlords.

If the renter provided a separate pet deposit, that must be accounted for as well.  Landlords may only subtract damage caused by the pet from that sum.


Depending on what the lease provided regarding responsibilities for utilities, landlords should check the status of those accounts to ensure the tenant has transferred the service back to the landlord, that service has not been interrupted,  and that there is no delinquent balance. Some utility companies have the right to charge the landlord for the tenant’s outstanding bills.  If possible, check out the status of these accounts prior to returning the deposit. 

A Good Time to Check for Pests

There are some maintenance tasks that are significantly cheaper to perform when the property is vacant — even if only for a few hours.  One of those tasks is checking for pests like bedbugs, or other conditions like mold.  Fully restoring the unit prior to the new tenant coming in will reduce the chance of income loss during the next tenancy.

Showing Occupied Properties
Showing properties while the exiting tenant is still around requires sensitivity. Disgruntled tenants scare away prospects and cause longer vacancies, which leads to income loss for the landlord. Landlords should check the lease or local tenancy laws to make sure they are allowed to advertise and show the rental while current tenants are in their final month.  All0w as much notice of tours as possible.  Arrive early for the tour and assure the current tenants that steps will be taken to protect their privacy and belongings.

Create a Photo Record

Record the condition of the unit before each tenant moves in and after each tenant leaves. When it comes to legal disputes, a picture is worth a thousand words — and a video can be worth a thousand pictures.

Plan to keep all important paperwork from the tenancy for some time. To determine the period of time, speak with a local legal expert. Keep all tenant information confidential and secure.

There is one more, all-encompassing rule to follow at move-out:  remember to keep all communication civil. Mutual respect goes a long way in reducing the chance of winding up in a costly legal dispute.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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