In order to place a dollar amount on this, we’ll need to calculate some average expenses incurred each time a unit goes unoccupied. We should take into account: rent loss due to vacant units, marketing expense to find new tenants, resident screening and administration fees, maintenance costs (general cleaning, paint supplies, carpet cleaning, fixture replacements or upgrades), and staff wages.
Let’s take a look using some estimated average costs for a unit with monthly rent of $800:
Average days vacant 40 @ $26.66/day $ 1,066
Marketing costs (newspaper, guides, internet) $ 300
Re-leasing commission $ 32
Carpet cleaning $ 200
Painting cost $ 175
Admin cost $ 75
General cleaning and prep $ 100
Maintenance staff wages $ 95
TOTAL TURNOVER COST $ 2,043
In multifamily properties, annual turnover could be as high as 75%. If a 200-unit community incurs even a 40% annual turnover rate, that’s 80 move-outs each year, nearly seven moves per month. Using the total turnover cost of $2,043 from above, we get a whopping annual turnover expense of $163,440. Ouch.
Working to reduce turnover even by 5%’through best practices, top-notch resident service, and continual contact with your tenants to ensure that they’re happy, can equate to over $20,000 in savings each year!
For more on how you can help diminish turnover by providing a remarkable living experience for your residents, check out our Give More, Get More article.