Your math assumes that you’ll be able to dovetail one tenant’s move-in the day after the previous tenant leaves. In reality, you may have to patch and paint and do a bunch of other non-essential deferred maintenance that you wouldn’t have had to do otherwise, and collect zero rent and consume a lot of your time looking for a new tenant, who may or may not turn out to be be a pain in the ass. I do pretty extensive tenant screening. It’s time consuming.
I guess it all depends on what your time and sanity is worth. For me, I don’t see the point in chasing an extra 3 percent per annum if it means I have tenants turning over every year or two. I’m making a solid return as it is. I’m fine with that. I don’t need to chase every last penny.
