A tenant gives notice. You think: a little paint, a cleaning, and a new listing. Maybe $1,500. Then you add up the real numbers.
The Full Cost Breakdown
Lost rent during vacancy: Average 30-45 days = $2,000-$3,500 on a $2,000/month rental.
Make-ready costs: Professional cleaning ($200-$400). Paint touch-up ($400-$1,000). Carpet cleaning or replacement ($300-$1,500). Minor repairs and maintenance catch-up ($200-$800). Lock re-key ($75-$150). Landscaping touch-up ($100-$300).
Leasing costs: Photography ($100-$300). Listing syndication and advertising ($0-$500). Leasing agent time for showings, screening, and lease execution ($300-$500 equivalent). Tenant screening fees (sometimes absorbed by owner).
Administrative costs: Lease preparation, move-in inspection documentation, utility coordination, insurance notification.
Conservative total: $3,800-$7,250 per turnover.
The Compounding Effect
If your tenant turns over every 14 months versus every 28 months, you will have roughly twice as many turnovers over a 10-year hold. On a $2,000/month rental, that is $20,000-$35,000 in additional turnover costs over the decade.
How to Calculate Your Number
Take your monthly rent. Multiply by 1.5 (average vacancy in months). Add $1,500-$3,000 for make-ready. Add $500-$1,000 for leasing. That is your turnover cost. Now divide your annual rent by that number. That is how many months of rent each turnover costs you.
The Retention Equation
Every dollar spent on tenant retention (responsive maintenance, fair rent increases, professional communication) that prevents a turnover saves $4,000-$7,000. That is the highest-ROI investment in rental property ownership.
The owners who obsess over getting top-dollar rent while ignoring retention are optimizing the wrong variable. Long-term income is a function of consistent occupancy, not maximum rent.
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