Tenant Turnover
Real Estate / CashflowTenant turnover is the process of a tenant vacating a rental unit and a new tenant taking their place. Every turnover carries a bundle of costs: a leasing fee (50-100% of one month’s rent), lost rent during the vacancy gap, make-ready expenses (cleaning, paint, minor repairs), and the owner’s or manager’s time coordinating it all. On a $2,000-per-month rental, a single turnover can easily cost $3,000 to $5,000 when all these components are counted.
Why long tenancies matter. The math is straightforward: five turnovers in five years cost 5× the leasing fees and 5× the vacancy gaps compared to one turnover in five years. A tenant who stays five years is not just reliable income — they are years of avoided transaction costs. Investors who screen well, respond to maintenance requests quickly, and avoid aggressive rent increases typically see lower turnover and higher lifetime returns per door.
Turnover is not purely bad — it can be an opportunity to reset rent to market rate or to remove a problem tenant. But unplanned, frequent turnover is a profit killer. The goal is not zero turnover; it is low unwanted turnover. Screen carefully on the way in, and maintain the relationship once they are in.
For the full cost breakdown of running rentals, see property management and costs. For how to reduce turnover through better placement, see tenant screening.