Property management & leasing
Tenant Turnover: Definition & Example
What Is Tenant Turnover?
Tenant turnover is when a tenant moves out and a new one moves in, along with the costs and vacant time that come with replacing them. It is often expressed as an annual turnover rate.
What does tenant turnover mean?
Every turnover costs money: lost rent while the unit sits empty, cleaning and repairs, paint, marketing, screening, and staff time. For a typical apartment, the total often runs from one to two months of rent.
Turnover rate is the number of move-outs in a year divided by the number of units. Property managers reduce turnover by responding quickly to maintenance, pricing renewals sensibly, and screening carefully so the right tenant is placed in the first place.
Some turnover is healthy because it lets owners reset rent to market, but high turnover usually signals problems with pricing, service, or tenant selection.
Tenant turnover example
A 40-unit building had 18 move-outs last year, a 45% turnover rate. Each turnover averaged 25 vacant days and $1,100 in make-ready costs. At $1,300 rent, each one cost about $2,170, or roughly $39,000 across the year.
Related terms
- Vacancy RateVacancy rate is the percentage of rental units in a property or market that are empty and available at a given time, or the share of potential rent lost to vacancy.
- Lease RenewalA lease renewal is an agreement between a landlord and a current tenant to extend the tenancy for another term, often with updated rent or conditions.
- Move-In InspectionA move-in inspection is a documented walkthrough of a rental unit at the start of a tenancy that records its condition, usually with a signed checklist and photos.
- Tenant ScreeningTenant screening is the process landlords use to evaluate rental applicants, typically by reviewing identity, income, rental history, credit, and background information against written criteria.
