The direct answer
Tenant turnover cost is the economic cost of replacing an outgoing tenant and can include vacancy, make-ready work, cleaning, repairs, leasing or advertising expense, concessions and staff or management time. A useful model separates one-time turnover costs from rent lost while the unit is unavailable.
Separate downtime from make-ready expense
Vacancy loss depends on the rent that could have been collected during the downtime. Make-ready expense is the cash spent to restore the unit. Keeping them separate makes it easier to see whether faster leasing or lower repair cost drives the result.
To apply the approach to an editable scenario, use the Prorated Rent Calculator. For the neighboring question, explore Rent Increase Calculator.
Include leasing and concession costs
Advertising, screening, leasing commissions, lock changes and move-in concessions can be material. Use the actual operating model rather than a generic percentage when estimating turnover.
Compare turnover with retention economics
A renewal concession can sometimes cost less than vacancy plus make-ready and leasing costs, but the comparison should also consider market rent, tenant quality and lease terms. Model both scenarios on the same time horizon.
Worked example
At $2,000 monthly rent, 20 days of downtime represents about $1,333 of gross rent opportunity using a 30-day month. If make-ready costs $1,200 and leasing or advertising costs $700, the modeled turnover cost is already about $3,233 before other concessions or administrative costs.
Common mistakes and limitations
Do not count only repairs. For many properties, vacancy and leasing friction are a large part of turnover economics.
Lease terms and state/local law may specify a different proration convention; calculator does not determine legal entitlement.
Frequently asked questions
Is vacancy loss a cash expense?
It is generally foregone revenue rather than a bill paid, but it still affects the economics of turnover.
Should security-deposit deductions reduce turnover cost?
Only when a lawful, supportable deduction is actually available; deposit rules vary by jurisdiction and should not be assumed in advance.
Sources and further reading
The article’s examples are illustrative arithmetic. The references below provide context for operating, valuation or transaction concepts; they do not endorse the assumptions or the calculator.
- GovInfo / HUD — 24 CFR §880.608 — Security deposits (federal housing program example)Program-specific example referencing state/local deposit requirements; not a national interest-rate rule.
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