What Tenant Turnover Actually Costs

Roughly two and a half months of rent, every time — which reframes almost every decision about raising the rent.

$5,025

One turnover on a $2,100 rental. That is 2.4 months of rent.

What one turnover costs

A $2,100/month single-family rental

Vacancy — 30 days between tenants: $2,100
Make-ready — paint touch-up, deep clean, carpet: $1,200
Leasing fee — 75% of one month: $1,575
Marketing, utilities and lawn while empty: $150

$5,025 — about 2.4 months of rent, every time.

Two things are worth noticing. First, the largest line is not the repairs — it is the empty month, which is why speed of re-leasing matters more than the make-ready budget. Second, the leasing fee is nearly as large as the physical work, which is why management contracts with a full-month placement fee are so much more expensive than their headline percentage suggests.

How it hides in a pro forma

Average tenancy	Turnovers per decade	Annualised cost	As a share of gross rent
1 year	10	$5,025	19.9%
2 years	5	$2,513	10.0%
3 years	3.3	$1,675	6.6%
5 years	2	$1,005	4.0%

Same property, same costs — only the length of tenancy changes.

This is not a separate line, and that is the problem

Most pro formas have no “turnover” row. The cost is scattered across vacancy, maintenance and management, which makes it invisible — and makes it easy to model a 5% vacancy assumption and a 5% maintenance assumption that together do not add up to what a single turnover actually costs. If your vacancy assumption was derived from turnover frequency, you have covered the empty month but probably not the make-ready or the leasing fee.

The decision this changes

Once you know a turnover costs $5,025, several common decisions invert.

Decision	Naive view	With turnover priced in
Raising rent $50/month on renewal	$600 a year more. Obviously do it.	If it triggers a move, 8.4 years to break even. Depends entirely on whether they stay.
Allowing pets	Risk of damage.	Longer tenancies and a much wider applicant pool. Usually pays, with a deposit and pet rent.
Fixing the dishwasher promptly	A $400 expense.	A twelfth of a turnover. The cheapest retention spending there is.
Offering a two-year lease	Locks in a rent you might beat.	Removes one turnover per decade — worth about $2,500 in present terms.
Screening a marginal applicant	The unit gets filled sooner.	A short tenancy costs a full turnover, and a bad one costs several.

The general shape: retention is worth far more than most landlords price it at, and the cheapest retention is competent, fast maintenance. None of that argues for never raising rent — see how much to raise the rent for the version that keeps you from falling years behind the market.

Reducing the cost per turnover

Lever	Effect
Start marketing at notice, not at move-out	The single biggest lever. Overlapping the leasing period can cut the empty month to a week.
Standardise finishes across your properties	One paint colour, one flooring product. Make-ready becomes a phone call, not a project.
Pre-schedule the make-ready before the tenant leaves	Contractors booked in advance start the next day rather than in two weeks.
Negotiate the leasing fee down	Often more valuable than shaving the monthly management rate.
Do a mid-lease inspection	Finds damage while the tenant is still liable, and signals attentiveness.
Offer a renewal incentive	A $300 appliance upgrade against a $5,025 turnover is not a close call.

Model it explicitly, at least once

Even if your template has no turnover row, compute the annualised figure for your assumed tenancy length and check it against your combined vacancy and maintenance lines. On the example that is $2,513 against $2,520 of budgeted vacancy — which means the maintenance and CapEx lines are carrying the make-ready costs, and are therefore thinner than they look. Run both versions in the calculator and see which side of your threshold the deal lands on.

Frequently asked questions

How much does tenant turnover cost a landlord?

Roughly two to three months of rent once you count the vacant period, make-ready work, the leasing fee and utilities while the unit is empty. On a $2,100 a month rental that is about $5,025 per turnover.

Is it cheaper to keep a tenant or raise the rent?

It depends on the size of the increase relative to the turnover cost. A $50 a month increase produces $600 a year, so if it causes a move that costs $5,025 it takes more than eight years to recover. Larger increases can still be worth the risk; small ones on a reliable long-term tenant usually are not.

How do I reduce turnover costs?

Start marketing when notice is given rather than after move-out, standardise finishes so make-ready is fast and cheap, pre-book contractors before the unit is empty, and negotiate the leasing fee. The vacant month is the largest single component, so anything that shortens it dominates.

Should turnover cost be a separate line in a pro forma?

It is not in most templates, and it is worth computing separately as a check. The cost is normally spread across vacancy, maintenance and management, which makes it easy to have assumptions that individually look reasonable but together do not cover a single realistic turnover.