Quick Answer: New lease trade-out measures the rent change when a unit turns over and is leased to a new resident at a different rate. Renewal trade-out measures the rent change when an existing resident renews their lease at a new rate. New lease trade-outs capture market pricing power; renewal trade-outs capture retention pricing effectiveness. Together, they define your blended rent growth.
See our full guides: New Lease Trade-Out and Renewal Trade-Out.
What Is New Lease Trade-Out?
New lease trade-out is the percentage change between the previous resident's rent and the new resident's rent on the same unit. It measures how much more (or less) the market will pay compared to what the prior resident was paying.
Example: ($1,850 − $1,700) ÷ $1,700 = +8.8% new lease trade-out
What Is Renewal Trade-Out?
Renewal trade-out is the percentage change between a resident's expiring rent and their new renewal rate. It measures how much rent increase existing residents accept to stay in place.
Example: ($1,760 − $1,700) ÷ $1,700 = +3.5% renewal trade-out
Key Differences: New Lease vs Renewal Trade-Out
| Factor | New Lease Trade-Out | Renewal Trade-Out |
|---|---|---|
| Who is involved | Departing resident → new resident | Same resident renewing |
| Market signal | True market pricing power | Retention pricing strategy |
| Typical magnitude | Higher (5–15% in strong markets) | Lower (2–6% typically) |
| Turnover cost | Incurs make-ready and vacancy costs | No turnover costs |
| Volume | Fewer events (depends on turnover) | More events (most residents renew) |
| Concession exposure | May include concessions | Rarely includes concessions |
When to Use Each Metric
Use new lease trade-out when: Assessing market rent growth, evaluating pricing strategy on vacant units, measuring the revenue impact of turnover, or benchmarking against comp set performance. Positive new lease trade-outs confirm that market rents are rising.
Use renewal trade-out when: Evaluating your renewal pricing program, balancing rent growth against retention, and projecting revenue from the existing resident base. Since renewals avoid turnover costs, even a modest renewal trade-out can be more profitable than a larger new lease trade-out.
How They Relate in Practice
The relationship between new lease and renewal trade-outs is revealing. When new lease trade-outs are significantly higher than renewal trade-outs, the property is under-pricing renewals — leaving money on the table. When renewal trade-outs approach or exceed new lease trade-outs, the property may be pushing renewals too aggressively, risking turnover.
The blended trade-out (weighted average of new lease and renewal trade-outs based on volume) is the number that flows through to actual rent growth. A property with 30% turnover and 70% renewals achieving +10% new lease and +4% renewal trade-outs would see a blended trade-out of approximately +5.8%.
The optimal strategy balances both: push renewals enough to capture value, but not so much that turnover increases and erodes gains through make-ready costs and vacancy loss. Use our net effective rent calculator to factor concessions into trade-out analysis, and see how BubbleGum BI's market intelligence tools track trade-out performance across your portfolio in real time.
Track New Lease and Renewal Trade-Outs in Real Time
BubbleGum BI calculates trade-outs at the unit, property, and portfolio level — so you can optimize pricing strategy and maximize blended rent growth.
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