📊 Definition
Turnover Cost per Move-Out measures the total expense incurred when a resident moves out, including make-ready, vacancy loss, marketing, and leasing costs. It quantifies the true cost of losing a resident.
The Formula
Plus vacancy loss during turn period
Example Calculation
A property had 95 move-outs last year with the following costs:
Where Does the Data Come From?
Turnover cost data requires integrating multiple sources from your PMS:
- Work Orders: Make-ready and repair costs by unit
- Accounting: Marketing spend and leasing costs
- Lease Data: Concessions given on new leases
- Vacancy Tracking: Days vacant × daily rent rate
Calculate turnover cost by summing all expenses related to losing a resident and relegare a unit.
Who Uses This Metric?
Asset Managers
Quantify the financial impact of turnover to justify retention investments. If turnover costs $5,000 per move-out, spending $500 on renewal incentives has a 10:1 ROI if it saves the resident.
Property Managers
Track turnover costs to manage budgets and identify cost reduction opportunities. High turnover costs justify faster make-ready processes or better resident retention strategies.
Finance Teams
Forecast turnover expenses based on expected move-out rates. At 50% annual turnover on 200 units (100 turns) and $5,000/turn, budget $500,000 for turnover costs.
Why This Metric Matters
1. True Cost of Turnover
Turnover costs are often underestimated. $5,250/turn × 100 annual turns = $525,000. Improving retention by 5% (5 fewer turns) saves $26,250 annually—often more than retention programs cost.
2. Retention Program Justification
Turnover cost quantifies the value of retention. If turnover costs $5,000, offering $500 renewal concessions or $1,000 property upgrades to retain residents has clear positive ROI.
3. Operational Efficiency Target
Tracking turnover cost reveals where to improve: faster make-readies reduce vacancy loss, better maintenance reduces repair costs, improved retention reduces total turnover.
💡 Pro Tip
Break down turnover cost by component. If vacancy loss is $2,000/turn but make-ready is only $1,500, focus on reducing turn time rather than make-ready costs—vacancy is the bigger driver.
Frequently Asked Questions
What's a typical turnover cost per move-out?
Generally $3,000-6,000 depending on unit type, market, and property age. Budget properties: $2,500-4,000. Mid-market: $3,500-5,000. Luxury: $5,000-8,000. Larger units and higher rents drive higher vacancy loss, the biggest cost component.
What's typically the largest component of turnover cost?
Vacancy loss (rent foregone during turn time) typically represents 30-40% of total turnover cost. At 20-25 days average turn time and $1,500 rent, vacancy loss is $1,000-1,250. Make-ready and repairs are second largest at 25-35%.
How can I reduce turnover costs?
Focus on retention (fewer turns), faster make-readies (less vacancy loss), preventive maintenance (lower repair costs), and strategic concessions (offer renewal discounts vs. new lease concessions). Every 1% improvement in retention saves significant costs.
Should I include leasing commissions?
Yes if applicable. If you pay leasing agents commissions or have in-house leasing salaries, allocate those costs to turnovers. Use consistent methodology—include all true costs of replacing a resident for accurate calculation.
How does turnover cost affect NOI?
High turnover directly reduces NOI through vacancy loss, maintenance expenses, and concessions. Reducing turnover from 55% to 50% on a 200-unit property (10 fewer turns) saves $50,000 at $5,000/turn—flowing directly to NOI and property value.
Reduce Turnover Costs with Data
BubbleGum BI tracks turnover costs by component via our operations dashboard—identifying where to focus efforts for maximum savings and NOI improvement.
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