Breaking Down Turnover Costs
Property managers know that reducing resident turnover makes good financial sense. Move-outs inevitably mean loss of rent and additional maintenance costs. According to Lori Hammond at Property Management Minutes, The cost of a single turn including rent loss generally starts in the range of $1,000 and can easily grow to a range of $2,500 to $5,000 depending on the capital replacements.
Using some back-of-the-envelope math, Hammond estimates that a 225-unit apartment community with a 40 percent turnover rate (7.5 moves a month), an average rent of $650 per unit and an average per-unit turnover expense of $1,800 is spending $162,000 annually on turnover, or about 9 percent of the gross rent potential.
No apartment community is going to have a zero turnover rate, but a sustained focus on reducing move-outs is likely worth the time.
In the above example, Hammond calculates that if that apartment community reduced turnovers by just one per month, it would save more than $20,000 in annual turnover expenses. Further, she estimates that this reduction would add about 96 hours to the maintenance schedule.