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The Real Cost of Tenant Turnover and Vacancy
A turnover costs the rent you do not collect while the unit sits empty, plus the cash you spend to clean, repair, advertise, and place the next tenant.
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A turnover costs the rent you do not collect while the unit sits empty, plus the cash you spend to clean, repair, advertise, and place the next tenant.
By RentalAnalytics Editorial Team · Published October 12, 2026
That total is the number a retention offer has to beat. A small rent concession can be cheaper than one vacant month. A large concession on a tenant who was leaving anyway is just a discount.
Split the event into four buckets so you do not hide the empty days inside a cleaning invoice.
Lost rent. Count every day from the old tenant's last paid day through the new tenant's first paid day. If it takes 20 days to turn the unit and 15 more days to lease it, that is 35 days of rent gone. Pro-rate the monthly rent. Do not stop the count because you were "almost" leased.
Make-ready. Cleaning, paint, carpet, locks, and the small repairs you do between tenants. A worn unit can need more than a tidy one. Keep capital replacements, like a full roof, in a reserve so one building project does not make every turnover look ruined.
Marketing and screening. Listing fees, signs, application costs, and any leasing fee you pay a manager. If you pay a month of rent to an agent, that month is part of this event even though it feels like a commission instead of a repair.
Admin time. Your hours to schedule vendors, show the unit, and write the lease. If you pay yourself nothing, you still spent the hours. Price them at a rate you would pay someone else, or you will prefer DIY turnover for a reason that is not in the numbers.
The National Apartment Association, writing on October 24, 2016, described a breakdown by Lori Hammond that includes lost rent, marketing, screening, cleaning, repairing, and possible capital upgrades. She estimates a single move-out can cost $1,000 to $5,000 depending on upgrades. The same note applies $1,800 per move-out to a 225-unit example with a 40% turnover rate, which is 7.5 move-outs a month and $162,000 a year. Cutting one move-out a month in that example saves more than $20,000 a year. Those are planning figures from that article, not a bill for your building. Source: NAA, Crunching the Numbers on Turnover Costs.
Use a round example. The unit rents for $1,800 a month, about $60 a day. It sits 30 days between a paid last month and a paid first month. Make-ready is $700. Listing and screening are $150. You value 12 hours of your time at $40, which is $480.
| Line | Example cost |
|---|---|
| Lost rent, 30 days | $1,800 |
| Make-ready | $700 |
| Marketing and screening | $150 |
| Your time | $480 |
| Total for one event | $3,130 |
Lost rent is more than half the total. That is typical when the vacant stretch is about a month and the unit did not need a remodel. Shorten the empty days to 10 and lost rent falls to about $600, so the event costs about $1,930. The paint bill did not change. The calendar did.
If this unit turns once a year, $3,130 is about 1.7 months of rent. Two turns in one year is $6,260, before you count any extra wear. Set that against the rent you actually collected. A landlord who underwrites 12 months of rent and then loses one month to vacancy has overstated income by the vacancy plus the make-ready, not by the vacancy alone.
Your unit's empty days are a property measure. The market vacancy rate is a different statistic, and what is rental vacancy rate walks that definition. A turnover pushes this unit toward its break-even collection rate for as long as it sits empty.
Some moves have nothing to do with your increase. People change jobs, buy a house, or combine households.
The Census Bureau reported that in 2015 to 2016, 22.9% of renters had moved in the last year, compared with 5.0% of owners. The bureau noted that the renter-owner gap in mover rates has been present since it started tracking tenure-based mobility in 1988, and that the renter mover rate was the lowest it had recorded. Source: U.S. Census Bureau, Overall Mover Rate Remains at an All-time Low.
Those are national one-year rates from that period, not a forecast for your building this year. They are a warning against a 0% turnover assumption. If you underwrite a rental as if the same tenant pays on the first of every month for a decade, you will overstate cash flow even when your screening is careful.
Use a local vacancy read as a cross-check, not as your unit's destiny. The vacancy heatmap shows vacancy for the metros it covers, set against the sample median. If your metro runs hotter than your unit's history, do not ignore your ledger. If your unit runs much hotter than the metro, look at condition, pricing, and management before you blame the market.
A retention spend is justified when it costs less than the event you avoid, and when the tenant was otherwise going to stay. On the $3,130 example, a $500 repair the tenant has asked for, or a renewal $50 under the increase you wanted, is cheap if it prevents that event. A $2,000 concession to a tenant who already gave notice and signed somewhere else does not prevent anything.
How much to raise rent at renewal frames the same trade from the pricing side. Tie the increase to a rent anchor, not only to the fear of a vacant month.
Put the cost on the cash flow statement in the year it happens. Do not bury it in a hopeful vacancy percentage and then also deduct nothing for paint.
A simple way:
Run that year in the cash flow analyzer twice. Once with your normal vacancy. Once with a full turnover at the dollar total you just built. The gap between those two results is what retention is worth on this property. If the gap is a few hundred dollars, a big concession is hard to support. If the gap is more than a month of rent plus make-ready, keeping a reliable payer is one of the higher-return uses of cash you have.
Days vacant are the lever you control most directly. Price the unit from current local evidence, schedule the make-ready before the keys come back when you know the end date, and keep screening tight so a fast lease does not become a second turnover.
A fast lease only helps if the next tenant meets a written standard. See Tenant Screening Criteria That Actually Cut Risk.
Treat it as income you never collected, which is how vacancy works in a cash flow statement. The paint, cleaning, ads, and fees are cash expenses on top. If you only lower the rent line and forget the make-ready, you will understate the cost of the move.
Because the scope changes. The NAA note's $1,000 to $5,000 estimate depends on upgrades. A clean unit with a short vacancy lands toward the low end. A unit that needs flooring, paint, and six weeks of lost rent lands toward the high end or past it. Build the lines for your unit instead of adopting the midpoint.
No. The Census mover rates show renters move for many reasons. A concession helps when price or a fixable complaint is what was pushing a tenant to shop. It does little when the tenant is buying a house or relocating for work. Ask why they are considering a move before you discount the renewal.
Look up the metro on the vacancy heatmap, then compare that figure with your own empty days divided by the days you had the unit available to rent. A single vacant month in a year is about 8% of the year for that unit. One bad month is not a metro statistic. A pattern of long gaps is.
The mortgage is still due, and lost rent is what you use to see whether rent covered it. Do not also add the full mortgage on top of lost rent or you will double count. Lost rent already shows the income that was supposed to pay the mortgage and every other bill.
Price one turnover with your rent, your empty days, and your make-ready invoices. Then open the vacancy heatmap and see whether the metro is tighter or looser than the vacancy you just assumed. Put the higher-cost case through the cash flow analyzer before you decide what a renewal concession is worth.
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