The right way to handle tenants who are moving out

Eventually, tenants experience that “feeling I get when I look to the west, and my spirit is crying for leaving,” which Led Zeppelin describes, and they move away.

When this happens, you will want to make the transition of the tenant out of the house as smooth as possible. The best way to do this is by telling the tenant what you expect from them. We send a letter that clearly spells out the checkout process. This way there are no misunderstandings, we are all on the same page, wavelength, sheet of music, or stairway to heaven.

Move Out Information Letter to Tenants

Some key things that we mention in our letter are:

1.) How much of their security deposit will be returned.

2.) There will need to be a review of their check in sheet (and attach a copy for them).

3.) What you expect in terms of house cleaning.

4.) Reminders to contact the utility companies to disconnect services in their name.

5.) Reminders to cancel newspaper and other subscriptions, and to provide the Postal Service with a change of address form.

6.) Reminders to contact us when they are ready for the final house inspection.

7.) A note that if keys are not returned, they will be charged.

8.) Any costs that we must pay to repair the house will be taken out of their security deposit, and we will refund the money due them within 10 days.

Download a copy of my “move-out” information letter to tenants.

(The link to my letter may not work on Internet Explorer. It seems to work fine with Google Chrome.)

Why be lenient with the damage deposit?

In general, we are pretty lenient when it comes to charging tenants for little things on the checklist. If they move out, and they have been good tenants, we are going return to them most, if not all of their security (or damage) deposit back, barring some obvious big broken item.

Our perspective is that we made a lot of money from the tenants over the years, and we don’t want them to leave on a sour note just because they thought we might have overcharged them on some ticky-tack repair.


Men of the World Unite!

John and Todd over at are staging a mustache and beard growing contest to help raise funds for charity.

I have confidently signed up to participate in the contest, and I have every intention of winning!

I invite you to join me.

The rules are simple:

1. Starting November 1st, start growing you mustache or beard. In the process they will encourage others who see them as they selflessly promote this great cause, to donate to the selected charities.

2.December 1-16 the contestants will have their photos posted at so everyone can vote on said mustaches and beards. On Dec. 17th, the winner will be announced

3. The winner will receive prizes.

For complete details, charge over and read John’s article:

Fearless Men’s Beard and Mustache Competition | Movember 2012.



Coming VERY Soon!

How to Turn Your Home into a Rental House, Instead of Selling It
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34 Responses to “The right way to handle tenants who are moving out”

  1. John says:

    Thanks for the mention and promoting our competition! Looking forward to your submission.
    John recently posted..Pinching PenniesMy Profile

  2. bryan says:

    Thanks for information. I’m Interested in downloading the copy of your letter but the link is broken. 🙁

    • Terry says:


      Thanks for pointing that out.

      The link works on Google Chrome, but it appears not to work on Internet Explorer.

  3. Thanks for the share Terry! Are you growing out a winter stache too?? I’ve already got some beard going on. Can’t grow it much further working in the education world!
    Todd – Fearless Men recently posted..Gadgets Are Forever: The Best Financial James Bond GadgetsMy Profile

  4. Pauline says:

    Great list. I have the same lenient policy, also because I don’t live in the UK where my flat is and I want to avoid trouble for other roommates when one moves out. There is a tax deduction on normal wear and tear anyway, so you can get your money back there.
    Pauline recently posted..Caring for your eyes on holiday: 5 tips from a proMy Profile

    • Terry says:

      I agree, it pays to stay on good terms with your tenants as they depart.

      Who knows? They might decide to return someday.

  5. Thanks for this checklist. I’m interested in investment properties in a few years and this will help me when I finally make the plunge. Your site is very interesting. I look forward to checking out more of it in the future.
    justin@thefrugalpath recently posted..Your Small Business Needs an Emergency Fund TooMy Profile

  6. Years ago I had a landlord weasel me out of a $400 deposit. I was an awesome tenant, but my dog scratched up a bedroom door. She said it cost $400 to fix. I don’t know what sort of door she bought, but I’m sure it wasn’t that much. It really rubbed me the wrong way, so I can see how avoiding that would be to your advantage. You never know when someone might need another rental or have a friend who needs one.
    Kim@Eyesonthedollar recently posted..How To Have a Cheap European HolidayMy Profile

    • Terry says:

      That was really short-term thinking by your landlord. He may think he won the battle, but he definitely lost the war. There’s no justification for charging that much for a door.

      If I were the landlord, I would just paint over the scratches on the door and not charge the tenant anything.

  7. Terry,

    I am lenient on deposit returns as well. I have re-rented to one tenant already and got several leads. If I did not treat them fairly, then I would certainly not have gotten future vacancies rented as quickly.
    Chuck @ Landlord Investor recently posted..Using Remnants to save $ on your rehabsMy Profile

  8. Terry, this is a really great list. Something I’ll have to hold onto for the future if I ever have rental real-estate. Communicating everything clearly like you’ve done can only increase your chances of having an easy transition.
    Jason Clayton | frugal habits recently posted..What’s with all the Closing Costs and Fees when getting a MortgageMy Profile

    • Terry says:

      If you decide to take the plunge to investment properties, let me know if you have any questions. I’ll be glad to assist you anyway I can.

  9. Untemplater says:

    Checklists are so handy. I use them for everything. It’s good to have a list of things that need to be done to remind people since packing and moving tends to make everyone a bit scatter brained.
    Untemplater recently posted..The Entrepreneur Life: Interview With The Founder Of Nuts And Bolts MediaMy Profile

    • Terry says:

      Yes, I think particularly tenants need guidance when they are moving since their minds are full of things that they must remember to do.

  10. So far we haven’t had any problems with renters moving out, but I’m definitely curious to read your full move-out letter as it seems like a good formality to have just as a CYA. That way there can be no, “You didn’t tell me…” down the road.
    Mrs. Pop @ Planting Our Pennies recently posted..IRS Double Standard – How Much Is Hair Worth?My Profile

    • Terry says:

      As you know (as a fellow investor/landlord), the more communication you have with the tenants, the less chance of either side having unrealistic expectations who the tenant moves out. My letter is sort of gentle way for both sides to have a happy conclusion to their tenant-landlord relationship.

  11. Great list Terry! It’s nice to see it from a landlord’s perspective. When we rented in the past, with the exception of one horrible one which we had to sue, most of our deposit would be returned to us. Usually the only thing that would be held out was for carpet cleaning, but we still got a big chunk of the deposit back each time.
    John S @ Frugal Rules recently posted..October Blog Goals UpdateMy Profile

    • Terry says:

      I’m glad to hear that things generally went well for you. I really can’t understand landlords who charge excessive amounts for seemingly minor repairs. I would rather have a tenant leave happily than to leave on a sour note. If nothing else, it creates bad karma.

  12. Katy says:

    I’m not in a position yet to turn my house into a rental but please let me know when your book comes out. I want to be prepared when I am ready.

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  19. Mark Z says:

    Thanks for the checklists. And also make sure that the accounting should be accompanied by labor and material receipts needed to clean and fix any damages caused by the tenant.
    Mark Z recently posted..Carpet Cleaning in Vancouver and SurreyMy Profile

  20. […] we do with all tenants, we gave them a “Move Out Information Letter” describing the steps of the moving out process, which they […]

  21. Elisa says:

    Wow, these are some really great ideas for anyone planning a move. I think it’s wise to start planning from early because a house move can be very overwhelming. Thank you for the post!
    Elisa recently posted..Cleaning Tips Before You Move OutMy Profile

  22. Though I agree that a walk-through should never be about confirming the return of a deposit, I have to disagree that they are not important enough to push through.

    The walk through should not be a time for the tenant to get the landlord’s approval. It should be a time to 1) discuss any problems that have not yet been addressed or have been discovered during cleaning and 2) for the landlord to point out to the tenant anything that the latter might have missed but would drain the deposit. That is, it’s a final chance to bring it up to the landlord’s standards.