What Is Tenant Turnover Cost?

The True Cost Nobody Talks About

Ask a landlord what a turnover costs and they will usually say "a few hundred dollars for cleaning and paint." They are off by a factor of 10.

The visible costs (cleaning, repairs, paint) are just the tip of the iceberg. The real cost includes weeks of lost rent, hours of your time, and the risk that the next tenant is worse than the one who left. When you add it all up, a single turnover typically costs $2,000-$5,000 for a standard rental unit. For higher-rent properties, it can exceed $10,000.

Understanding this number changes how you think about every management decision. Is it worth raising rent $100/month and losing the tenant? Not if the turnover costs you $4,000. Is it worth investing $200 in a maintenance request to keep the tenant happy? Absolutely, if it prevents a $3,500 turnover.

Breaking Down Turnover Costs

Let us walk through a real turnover on a $1,500/month unit:

Lost rent during vacancy. Average time from move-out to new tenant move-in: 3 weeks (21 days). Lost rent: $1,050. This is the single largest turnover cost and the one most easily reduced by fast turnovers and pre-leasing.

Make-ready costs. Professional cleaning: $275. Interior paint (full unit, 2-bed apartment): $600. Carpet cleaning: $200. Minor repairs (hardware, caulk, patches): $200. Lock re-key: $80. HVAC filter, smoke detector batteries, light bulbs: $40. Total make-ready: $1,395.

Marketing and leasing. Listing photos and posting: $50 (or free on many platforms). Showing the unit: 3-5 showings at 30 minutes each = 2.5 hours. Application processing: 1 hour. Lease signing: 1 hour. Screening fee (if landlord-paid): $40. Total: $90 + 4.5 hours of your time.

Administrative time. Move-out inspection: 1 hour. Security deposit processing: 1 hour. Contractor coordination: 2-3 hours. Move-in inspection with new tenant: 1 hour. Total: 5-6 hours.

Your time value. Total time: 10-12 hours. At $50/hour implied value: $500-$600.

Grand total: $3,035-$3,145. For a $1,500/month unit. That is more than two full months of rent consumed by one turnover.

How Turnover Costs Compound Across a Portfolio

Now scale this to a 10-unit portfolio with average rent of $1,400/month.

Low turnover (20%, 2 turnovers/year): 2 × $3,000 = $6,000/year in turnover costs.

Average turnover (40%, 4 turnovers/year): 4 × $3,000 = $12,000/year.

High turnover (60%, 6 turnovers/year): 6 × $3,000 = $18,000/year.

The difference between low and high turnover: $12,000/year. That is $12,000 that goes directly to your profit if you can keep tenants in place. On a portfolio generating $168,000 in annual gross rent, $12,000 represents 7.1% of your gross revenue consumed by turnover.

This is why the best landlords view retention as a profit center, not just a nice-to-have.

Strategies to Reduce Turnover Costs

Reduce turnover frequency. The cheapest turnover is the one that does not happen. Focus on retention: responsive maintenance, fair renewal increases (3-5%), good communication, and treating tenants with respect. Each avoided turnover saves $3,000+.

Speed up the turnover process. Pre-schedule contractors. Overlap tasks (cleaner and painter working simultaneously in different rooms). Pre-market the unit while the current tenant is still there. Goal: 7-10 days from move-out to new move-in instead of 21-30 days.

Use durable materials. LVP flooring instead of carpet (no carpet cleaning or replacement needed). Scrubbable satin paint (touch up instead of full repaint). Solid-surface countertops (do not stain or chip). Higher initial cost, dramatically lower turnover cost over time.

Screen better. Tenants who stay longer reduce turnover frequency. Screen for stability: employment tenure, previous rental duration, income stability. A tenant who has been at their job for 5 years and rented their last place for 3 years is more likely to stay than someone who changes jobs and apartments annually.

Track your turnover costs. You cannot improve what you do not measure. Track every expense for every turnover. Calculate your cost per turnover and your annual turnover rate. This gives you the data to make better decisions.

Common Mistakes

Underestimating turnover costs. "It only costs me $500 to clean and paint." No, it costs you $3,000-$5,000 when you include everything. Until you accept the true cost, you will not invest properly in retention.

Prioritizing rent maximization over retention. A $150/month rent increase that causes a tenant to leave nets you $1,800/year in additional revenue but costs you $3,000-$5,000 in turnover. You lose money in Year 1. A $75/month increase that the tenant accepts nets $900/year with zero turnover cost. Better deal.

Not pre-marketing. Waiting until the unit is move-in ready to start marketing adds 1-2 weeks of vacancy. List the unit 2-4 weeks before it is available, show it while the make-ready is in progress (with the applicant's understanding), and have a lease signed before the unit is finished.

Accepting bad tenants to avoid vacancy. A 3-week vacancy costs $1,050. A bad tenant who stops paying after 4 months, causes $2,000 in damage, and requires eviction costs $10,000+. The vacancy is always cheaper than the bad tenant.

Frequently Asked Questions

What is the biggest turnover cost?

Lost rent during vacancy is typically the largest single cost, representing 30-50% of total turnover expense. This is also the most controllable cost since faster turnovers and pre-leasing directly reduce it.

How do I calculate my portfolio's annual turnover cost?

Track every expense for each turnover (vacancy days, make-ready costs, marketing, screening, time). Multiply the average cost per turnover by your annual number of turnovers. For benchmarking, divide total annual turnover cost by total annual gross rent to get your turnover cost ratio.

Should I factor turnover costs into my ROI calculations?

Absolutely. Turnover costs are a real, recurring expense that reduces your actual return. Include an estimated annual turnover cost in your cash flow projections. Use your historical data or estimate 1-2 turnovers per 10 units per year at $3,000 each.