Turnover has a triple cost: vacancy time, new tenant acquisition cost, and make-ready expenses (painting, repairs). Reducing turnover by 10 percentage points can improve NOI more than raising rents.
Contracts not renewed or terminated early during the year ÷ total active contracts. Pull it from your management system, or review the year's expired contracts in your spreadsheet.
With 40% turnover in 50 units, you need to fill 20 units every year. If each process takes 30 days of vacancy and $1,800 in cost, that is $36,000/year just in turnover costs — not counting uncollected rent.
| Status | Range |
|---|---|
| Healthy | < 20% annual (tenants renew for an average of 5 years) |
| Alert | 20–40% annual |
| Critical | > 40% annual (structurally high turnover) |
The main cause of non-renewal is lack of proactive contact. A renewal process that starts 60 days before expiration and offers clear terms retains 70–80% of satisfied tenants who would otherwise not renew.
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