6 Tips for a Smooth Rental Property Turnover
If you’re investing your self-directed retirement plan in rental properties, tenant turnover is a part of the process. Successful investors know how to quickly and efficiently execute the turnover process and maximize profits as a result.
The more time a property is vacant, the less time it’s producing rent. The less ready a property is when being marketed, the less likely it will attract quality tenants — you get the idea.
As with so many factors of successful property investing in a self-directed IRA or Solo 401(k), having a plan in place before you need it is one of the best ways to be able to act effectively when the need arises.
From timely notifications to knowing when to show and market your property, here are 6 tips to a smooth rental property turnover when a tenant moves out.
1. Timely Notification
Knowing in advance what a tenant’s intentions are at the end of a lease term makes it easy to put your turnover process in motion.
With a month-to-month rent, tenants only need to provide a 30-day notice. So whenever the tenant does decide to leave, it may feel like a surprise. Although this isn’t optimal, it can be okay in the right market where demand is high.
With longer lease terms, you may want to have a policy that requests notice as much as 60-days in advance if local law allows. In any longer lease, you should make a habit of reaching out to the tenant in writing to see if they intend to renew their lease or not.
Even if the law only requires 30-day notice, that doesn’t prevent you from asking your tenant to give you a heads-up about their moving date at least two months in advance. If they plan on terminating their lease, remind them what the proper timeline and process is. (period, not comma)
The bottom line is, the sooner you know, the sooner you can prepare for the turnover process.
2. Setting Proper Expectations with Current Tenants
Within the limits of local landlord-tenant laws, you can ask your current tenants to make certain concessions to help you rent the property quickly.
With proper notice, you can schedule showings while the property is still occupied. If you happen to have a problem tenant, this may not be advisable, however. Waiting to show the property when it’s empty and clean may be the better course in some cases.
You should also have a tenant move-out checklist that is delivered as soon as they provide notice. This can include a reminder of the steps they will need to take before vacating, like cleaning, removing all personal belongings, replacing all non-functional light bulbs, etc.
The checklist can also include your expectations of the property condition that will be acceptable and result in a full refund of security deposits.
Several conditions of this checklist will vary based on the quality of property and local laws. In some jurisdictions, your lease can include conditions such as the tenant paying for carpet cleaning.
If applicable, you want to be the one to hire the carpet cleaner and pay for that service out of their deposit, and not rely on the tenant to get this done.
3. Move Out-Inspections
It’s best if you or a trusted representative can perform a move-out inspection with the tenant present. This allows you to accurately document the condition of the property with photos and/or video.
Gathering this evidence in the presence of the tenant can avoid any disputes over the actual condition at move-out. It can be helpful to have copies of the images from your move-in inspection, so any pre-existing damage can be identified as well as anything that may be new.
The move out inspection serves two important functions:
- To identify whether there are tenant-caused issues that will impact the return of security deposits, and
- This is your earliest opportunity to perform a pre-rental check on the condition of the property and identify any repairs that need to be accomplished to make the property safe and rent-ready for your next tenants.
Some landlords perform all of these actions with one checklist in the presence of the exiting tenant. Some may choose to have a separate check-out form, and then perform a more detailed safety and mechanical inspection without the time constraints of having the tenant looking over their shoulder and wanting to give up the keys and move on.
You aren’t going to ding a current tenant if the kitchen faucet drips, but you sure want to know that needs to be repaired before bringing in the next renter.
4. Know Your Property Condition
The window between tenants is often the best time to deal with any major repairs or upgrades a property might need. It’s much easier to do major systems work like roofing, whole house painting, HVAC, and the like when the property is vacant.
If you’re performing regular safety inspections at least once a year, you should have decent handle on the condition of the property. If you know a larger repair is going to be appropriate during your next vacancy, you can start making plans in advance to acquire the materials and hire vendors so the work can be done quickly.
When you combine this prior knowledge with the information from a move-out inspection, you can put in motion any necessary work as quickly as possible once the property is vacant.
5. Execute your Work Plan
By having advanced notice of a vacancy and a general feel for the condition of the property, you should be able to arrange for contractors to perform work quickly. If you need to add a thing or two based on the move out inspection, that can typically be simple to schedule on short notice if it is minor in nature.
6. Marketing the Property
Effectively marketing your rental property is the next step during the tenant turnover process. Timing plays an important role in this strategy.
If your unit is marketable with the current tenant in place (and local laws allow it), start showing the property as soon as possible. This will shorten your time between tenants.
If the property is in less than showable condition, don’t show it — it’s really is that simple.
I recall a personal case years ago when our family was relocating. We weren’t looking to immediately buy a property, and planned to initially rent and get a better feel for the town first. We visited one property that was currently occupied with a hoarder.
Every flat surface in the house was 3 layers deep in old makeup bottles, magazines, and other random items. It was a nice house, and was likely only going to need a thorough cleaning, but we couldn’t get out the door fast enough.
We wondered why the property manager was showing the property in this condition. They would have been much better served by waiting for the current tenant to vacate, doing the necessary cleanup, and then showing the property.
Processes Ensure Success
The situations that surround any tenant turnover will vary. By having good plans and checklists in place, and by working with your current tenants to set proper expectations, you give yourself the best chance of having a quick turnover and attracting a quality new tenant.
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Quick answers to common questions
We’ll take you through a simple, step by step process designed to put your investment future into your own hands…immediately. Everything is handled on a turn-key basis. You take 100% control of your Retirement funds legally and without a taxable distribution.
YES! In 1974, Congress passed the Employee Retirement Income Security Act (ERISA) making IRA, 401(k) and other retirement plans possible. Only two types of investments are excluded under ERISA and IRS Codes: Life Insurance Contracts and Collectibles (art, jewelry, etc.). Everything else is fair game. IRS CodeSec. 401 IRC 408(a) (3)
It’s actually pretty simple. Early on, regulators let the securities industry take the lead in educating the public about retirement accounts. Naturally, brokers and banks promoted stocks, bonds, and mutual funds—giving the impression that those were the only allowed investments. That was never true... and still isn’t. You can probably guess why they kept the rest under wraps.
It is possible to use funds from most types of retirement accounts:
- Traditional IRA
- Roth IRA
- SEP IRA
- SIMPLE IRA
- Keogh
- 401(k)
- 403(b)
- Profit Sharing Plans
- Qualified Annuities
- Money Purchase Plans
- and many more.
It must be noted that most employer sponsored plans such as a 401(k) will not allow you to roll youraccount into a new Self-Directed IRA plan while you are still employed. However, some employers will allow you to roll a portion of your funds. The only way to be completely sure whether your funds are eligible for a rollover is by contacting your current 401(k) provider.
A Solo 401(k) requires a sponsoring employer in the format of an owner-only business. If you have a for-profit business activity – whether as your main income or as a side venture – and have no full-time employees other than potentially your spouse, your business may qualify. The business may be a sole-proprietorship, LLC, corporation or other entity type.
A self-directed retirement plan is a type of IRA or 401(k) that gives you greater control over how your retirement funds are invested. Unlike traditional accounts held at banks or brokerage firms that limit you to stocks, bonds, and mutual funds, self-directed plans allow you to invest in a wide range of alternative assets including real estate, private businesses, precious metals, cryptocurrency, and more.
These plans still follow the same IRS rules and maintain the same tax-deferred or tax-free benefits as conventional retirement accounts. The difference is simply in how and where you choose to invest.
No. Moving to a self-directed IRA or Solo 401(k) does not trigger any taxes, as long as your funds are eligible for rollover.
Self-directed retirement plans maintain the same tax-advantaged status as traditional plans offered by banks or brokerage firms. The key difference is flexibility—our plans are designed to give you greater control and allow for a wider range of alternative investments beyond stocks, bonds, and mutual funds.
A prohibited transaction is any action between your retirement plan and a disqualified person that violates IRS rules and can lead to serious tax consequences. Under IRS Code 4975(c)(1), prohibited transactions include:
- Selling or leasing property between your plan and a disqualified person Example: Your IRA cannot purchase a property you already own.
- Lending money or extending credit between the plan and a disqualified person Example: You cannot personally guarantee a loan your IRA uses to buy real estate.
- Providing goods or services between your plan and a disqualified person Example: You can’t use your personal furniture to furnish a rental property owned by your IRA.
- Using plan income or assets for the benefit of a disqualified person Example: Your IRA cannot buy a vacation home that you or your family use.
- Self-dealing by a fiduciary (using plan assets for their own benefit) Example: Your CPA shouldn't loan your IRA money if they’re advising the plan.
- Receiving personal benefit from a deal involving your IRA's assets Example: You can’t pay yourself from profits your IRA earns on a rental.
If a transaction doesn’t clearly fall within the allowed guidelines, the IRS or Department of Labor may review the situation to determine if it qualifies as a prohibited transaction.
Disqualified persons are individuals or entities that are prohibited from engaging in certain transactions with your IRA or 401(k). Doing so could trigger a prohibited transaction, which may result in taxes and penalties.
Here’s who is considered a disqualified person:
- You (the account holder)
- Your spouse
- Your parents, grandparents, and other ancestors
- Your children, grandchildren, and their spouses
- Any advisor or fiduciary to the plan
- Any business or entity owned 50% or more by you or another disqualified person, or where you have decision-making authority
These rules exist to prevent self-dealing and ensure your retirement plan remains in compliance with IRS regulations.
(Reference: IRC 4975)
Understanding and following these rules can be tricky, but it’s very doable. The best way to stay compliant is to work with professionals who specialize in self-directed retirement plans. They can help you navigate IRS guidelines and avoid prohibited transactions.
If an IRA holder is found to have engaged in a prohibited transaction with IRA funds, it will result in a distribution of the IRA. The taxes and penalties are severe and are applicable to all of the IRA’s assets on the first day of the year in which the prohibited transaction occurred.
Yes. While self-directed retirement plans allow for a wide range of investments, there are a few important restrictions.
You cannot invest in collectibles or life insurance contracts, and you must avoid prohibited transactions—activities that benefit you personally rather than the retirement plan. These include things like buying or selling property to yourself or family members, using plan assets for personal gain, or self-dealing in any way.
Violating these rules could cause your entire IRA to lose its tax-advantaged status. To protect your account, it’s essential to work with professionals who understand IRS regulations and can help you stay compliant.
This is a common misconception. In many cases, professionals may simply be unfamiliar with self-directed retirement plans, as they fall outside their usual scope of work. CPAs and tax preparers are trained to file taxes, not necessarily to advise on alternative retirement strategies. Financial advisors and brokers often work for firms that focus on traditional investments like stocks and mutual funds—and may not benefit from or support alternative options like real estate or private lending.
Self-directed retirement investing is legal under IRS rules—but like any specialized area, it requires working with professionals who understand how it works.
The IRS has rules in place to make sure your IRA is used only for the exclusive benefit of the retirement account—not for personal gain or to help family members. These rules can get complicated because there are many ways a conflict of interest can occur, even unintentionally.
For example, if your IRA buys a house and rents it to your mother, you might be reluctant to evict her if she stops paying rent. That emotional connection creates a conflict between what’s best for your IRA and your personal relationships, something the IRS aims to prevent.
These rules help ensure your retirement account stays compliant and protected. (See IRC 408)
Yes. Most tax-deferred retirement accounts—such as Traditional IRAs, old 401(k)s, 403(b)s, and TSPs—can be rolled over into a self-directed IRA or Solo 401(k), depending on your eligibility. Roth IRAs cannot be rolled into these accounts.
You can contribute directly from earned income, subject to annual IRS contribution limits. The method and amount depend on the type of plan you have (e.g., Solo 401(k) vs. IRA).
To take a distribution, you'll request funds through your custodian or plan administrator. Distributions may be taxable depending on your account type and age. Early withdrawals may be subject to penalties.
For 2025, the Solo 401(k) max contribution limit is $81,250 if age 60-63, $77,500 if age 50-59 or 69+, and $70,000 if under 50. Traditional and Roth IRAs have a limit of $7,000 ($8,000 if age 50+). Limits are subject to IRS adjustments.
Yes. IRA contributions are typically due by your personal tax filing deadline (e.g., April 15). Solo 401(k) contributions follow your business tax filing deadline, including extensions.
IRS reporting requirements vary depending on the type of self-directed retirement plan you have. Here’s a quick breakdown of what you need to know
Please note: Our team can help you understand what’s required for your specific account, but we don’t provide tax or legal advice. We always recommend working with a qualified tax professional to ensure full IRS compliance.
Self-Directed IRA (Traditional or Roth)
- Form 5498 – Filed by your custodian each year to report contributions, rollovers, and the fair market value (FMV) of your account.
- Form 1099-R – Issued if you take a distribution or move funds out of your IRA.
- Annual Valuation – You'll need to provide updated FMV for any alternative assets held in the account, such as real estate or private placements.
Solo 401(k)
- Form 5500-EZ – Required if your plan assets exceed $250,000 as of year-end. Must be filed annually by the plan participant.
- Form 1099-R – Required if you take a distribution or roll funds out of the plan.
- Contribution Tracking – Keep records of employee and employer contributions. These are not filed with the IRS but may be needed for tax reporting or audits.
SEP IRA
- Form 5498 – Filed by your custodian to report contributions and FMV.
- Form 1099-R – Filed by your custodian. Issued for any distributions.
- Employer Contributions – Must be reported on your business tax return (and on employee W-2s, if applicable).
Health Savings Account (HSA)
- Form 5498-SA – Filed by your HSA custodian to report contributions.
- Form 1099-SA – Filed by your HAS custodian. Issued for any distributions.
- Form 8889 – Must be included with your personal tax return to report contributions, distributions, and how funds were used.
