Did you know? Apartment turnovers cost property owners an average of $3,872 per unit in 2023, with expenses for a 300-unit property exceeding $567,000 annually. These costs include lost rent, labor, materials, and hidden operational expenses.
Key Insights:
- Lost Rent: Vacant units lose about $50 daily; for a $1,500/month unit, a 15-day vacancy costs $750.
- Labor Costs: Cleaning, repairs, and painting range from $400 to $1,200 per unit.
- Materials: Flooring, appliances, and supplies can add $500 to $2,500 per unit.
- Other Costs: Marketing, utilities, and administrative tasks cost $200–$500 per turnover.
Why It Matters:
Turnovers significantly impact profitability. Small changes - like improving tenant retention or streamlining processes - can save thousands annually. For example, reducing vacancy by just 5 days saves $200–$250 per unit.
Quick Tip:
Focus on preventive maintenance, tenant satisfaction, and faster turnover processes to control costs and boost Net Operating Income (NOI).
Navigating Tenant Turnovers: Minimizing Costs and Vacancy Periods
Main Cost Categories for Apartment Turnovers
Managing apartment turnovers effectively requires a clear understanding of where your money goes. Turnover costs typically fall into four main categories: labor, materials and supplies, vacancy-related lost rent, and other direct and indirect costs. Let’s dive into each of these.
Labor Costs
Labor is often one of the largest expenses during turnovers. It covers everything from cleaning crews to administrative staff. For instance, professional cleaning services usually charge about $50 per hour [5]. The exact cost depends on the unit's condition and tenant history.
Key players in the turnover process include maintenance technicians, cleaning crews, painters, and administrative staff. Maintenance technicians handle repairs, while painters manage touch-ups or full repaints. Administrative staff oversee move-out procedures and lease paperwork.
Labor costs also vary by location. In cities like New York or San Francisco, rates are much higher compared to smaller markets. For properties with 300 or more units, these differences can significantly impact budgets. Interestingly, some large communities cut costs by bringing certain tasks in-house, such as creating regional painting teams [6].
It’s worth noting that maintenance staff face high turnover themselves, with an annual rate of 39.2%, according to the National Apartment Association [1]. This turnover adds another layer of complexity to managing labor expenses.
Materials and Supplies
Materials and supplies are another major cost driver, influenced by unit condition and the type of upgrades needed. These expenses include paint, flooring, appliances, fixtures, and cleaning supplies.
- Painting: Costs range from $300 for touch-ups to over $1,200 for a full repaint [7]. Using the same paint color across units can simplify touch-ups and reduce inventory costs.
- Flooring: Vinyl plank flooring costs about $3 per square foot, while hardwood ranges from $10 to $15+ per square foot [8]. Carpet cleaning or replacement adds another $300 to $1,000 per unit [7].
- Appliances: Repairs typically cost between $100 and $300. Replacing larger appliances can range from $500 to $2,000, depending on quality [7]. A basic appliance suite costs around $2,000, while high-end brands can exceed $10,000 [8].
- Cleaning and Minor Repairs: Professional cleaning costs between $200 and $500 per unit. Smaller repairs, like fixing fixtures or patching walls, range from $100 to $1,000 [7].
Large properties often save on materials by buying in bulk. Standardizing finishes and fixtures across units can also help lower per-unit costs.
Vacancy Period and Lost Rent
Vacancy-related lost rent is often the single largest expense during turnovers. On average, tenant turnover costs about $1,825 per unit, with lost rent accounting for $1,600 of that total [9].
The financial impact grows with each passing day. A 15-day turnover period alone can result in significant lost income, even before factoring in cleaning or repair costs.
In 2018, the apartment turnover rate was 46.8% [9][4], meaning nearly half of all units experienced vacancy periods that year. For a 300-unit property, this equates to roughly 140 turnovers annually. Market conditions also play a role. As of January 2025, the national vacancy rate stood at 6.8% [10]. While a rate near 7% is often considered healthy, prolonged vacancies can hurt net operating income, property valuation, and refinancing options [10].
Other Direct and Indirect Costs
Turnovers come with additional expenses like marketing, utilities, and administrative tasks.
- Marketing: Costs for listing fees, professional photography, virtual tours, and advertising range from $200 to $500 per unit.
- Utilities: Even vacant units require utilities like electricity, water, and climate control for safety and showings. These costs can add $100 to $200 per month, depending on unit size and local rates.
- Administrative Costs: Tasks like tenant screening, lease processing, and move-in coordination require significant time and effort. While these may seem minor individually, they add up quickly across multiple turnovers.
Extended vacancies can also lead to higher utility bills and routine maintenance needs. Empty units often require regular inspections and climate control, further increasing costs [4].
Understanding these cost categories helps property managers identify areas for savings and better budget planning in large communities.
Turnover Cost Breakdown by Category
Expanding on earlier discussions about turnover challenges, here's a closer look at the specific cost categories involved. This breakdown aims to help you fine-tune your budgeting for large multifamily properties.
Direct vs. Indirect Cost Classifications
Costs fall into two main groups: direct and indirect. Direct costs are tied to readying a unit for the next tenant - think painting or cleaning. Indirect costs, on the other hand, cover administrative tasks, marketing efforts, and revenue lost during vacancy periods. Each requires its own management approach.
| Cost Category | Cost Type | Average Range | Key Components |
|---|---|---|---|
| Labor Costs | Direct | $400 - $1,200 | Maintenance, cleaning, painting, repairs |
| Materials & Supplies | Direct | $500 - $2,500 | Paint, flooring, appliances, fixtures |
| Lost Rent | Indirect | $1,200 - $2,400 | Revenue lost during vacancy |
| Marketing & Admin | Indirect | $200 - $500 | Advertising, tenant screening, lease setup |
| Utilities & Maintenance | Indirect | $150 - $400 | Vacant unit utilities, inspections |
Below, we’ll break down each category, starting with labor costs.
Labor Cost Breakdown
Labor costs can vary depending on whether tasks are done in-house or outsourced. For example, painting a unit often requires two workers over 1.5 to 2 days [11]. A landlord shared that they paid $1,080 for nine man-days of painting, which works out to about $15 per hour [11]. General repairs follow a similar pattern; another property manager spent $480 for four man-days of repairs at the same hourly rate [11]. Don’t forget to factor in an additional $50 for trash and debris removal [11].
Material and Supply Expenses
The cost of materials - like paint, flooring, and fixtures - typically falls within the previously noted ranges [7]. These expenses are essential but predictable, making them easier to budget for.
Lost Revenue Impact
Lost rent is by far the biggest financial hit during turnovers. On average, turnover costs per unit hover around $1,825, with lost rent alone accounting for about $1,600 of that total [4]. For a 300-unit property with a turnover rate of 46.8% [4], around 140 units turn over each year. This revenue gap has a substantial effect on net operating income (NOI).
Administrative and Marketing Costs
Often underestimated, administrative costs include tenant screening, lease processing, and move-in coordination. Marketing expenses - such as professional photography, virtual tours, and online ads - generally range from $200 to $500 per unit. While these costs are smaller on a per-unit basis, they add up quickly across multiple turnovers.
Total Cost Reality
"An increase in repairs or a decrease in rents will both lower net operating income." - Cristy Andrews, CPA with Warren Averett [12]
Turnover costs typically range from $1,500 to $3,500 per unit [12], though some cases can exceed $5,000 depending on the unit's condition and local market conditions [3]. Direct costs like labor and materials are often more visible and manageable, but indirect costs - especially lost rent - represent the largest opportunity for savings. Streamlining turnover processes can help reduce these expenses, ultimately improving your bottom line.
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What Affects Turnover Costs in Large Communities
Turnover expenses in large communities are shaped by several key factors, including the scale of operations, unit conditions, and regional market influences. Understanding these elements is crucial for managing labor, materials, and vacancy-related costs effectively.
Property Size and Cost Savings
Communities with over 300 units often see reduced per-unit turnover costs. This is largely due to economies of scale, which help lower expenses. Larger properties also tend to experience lower turnover rates compared to smaller ones [13].
Nationally, retention rates average between 50–58%, leaving a turnover rate of 42–50% across all property sizes [15]. However, larger communities often outperform these averages thanks to their professional management and enhanced resources.
Centralized systems provide another advantage for larger properties. Many apartment firms have invested heavily in technologies that streamline operations and improve the resident experience. Tom Toomey, CEO of UDR, highlights the value of these systems:
"We have an ability to orchestrate and enhance UDR's living experience through more than 1 million daily touch points with our existing and prospective residents, which helps improve the retention and lower costs to drive margin expansion and cash flow growth... To enable this, we have equipped our associates with actionable data and more responsibilities." [14]
Additionally, larger communities often feature more amenities [13]. While traditional perks like pools or gyms were once top priorities, residents now place greater emphasis on convenience, social connections, and meaningful living experiences [2]. Larger properties are better positioned to invest in these features, which can significantly boost retention.
Unit Condition and Tenant History
The state of your units and the quality of tenant screening have a direct effect on turnover costs. Well-maintained units can extend occupancy by up to 50%, reducing turnover frequency and associated expenses [17].
Effective tenant screening is another powerful tool for managing costs. Careful vetting helps property managers identify residents more likely to stay long-term [16], minimizing turnover and maximizing revenue.
Unresolved maintenance issues are a major factor in tenant dissatisfaction, with 20% of renters citing this as a reason for leaving [17]. Poor unit conditions can quickly escalate costs, with turnover expenses ranging from $1,000 to $5,000, depending on the situation [3]. Units left in poor condition or vacated by problematic tenants often incur the highest costs. On average, turnover expenses are equivalent to three months' rent, excluding lost income during vacancy [17].
Preventive maintenance programs can mitigate these costs. Regular inspections, conducted quarterly, help identify and address potential issues before they worsen. This approach not only reduces tenant dissatisfaction but also limits the scope of necessary turnover work [16].
Location and Regional Labor Costs
Regional factors play a significant role in turnover expenses. Labor rates and material costs vary widely depending on the location. While the average apartment turnover cost is about $1,750 per unit, regional differences can push this figure above or below the national average of $3,872 [18]. Higher wages for construction, maintenance, and cleaning services in certain areas can drive up costs.
Market-specific challenges also impact expenses. For example, Essex Property Trust, which operates on the West Coast, reported increased turnover costs in Q2 2023 due to eviction-related move-outs [1]. Similarly, Camden, a Houston-based REIT, saw a rise in early move-outs of non-payers, doubling from the previous year and leading to higher repair and maintenance expenses [1].
Geographic trends in renter behavior further influence turnover. Coastal cities like New York tend to have lower renter turnover, while more transient markets, such as Charleston, SC, experience higher rates [13]. Properties in high-turnover areas must budget accordingly and prioritize strong retention strategies.
Economic conditions also play a role. Tim Argo, MAA’s chief strategy and analysis officer, notes:
"With some of the increased uncertainty in the economy, people just tend to stay put where they are... I think that's helping to benefit our turnover, and people are just a little more hesitant to make big life decisions." [14]
Local job markets, housing costs, and economic stability can create significant regional variations in turnover patterns. Properties in more volatile areas may face unique challenges compared to those in stable markets.
How to Control and Lower Turnover Costs
Cutting turnover expenses requires a mix of smart planning, efficient processes, and thoughtful management of resources. By focusing on these areas, property managers can reduce costs while maintaining high-quality standards.
Regular Maintenance and Keeping Tenants
Staying ahead with preventive maintenance can save between 12–20% on annual repair costs [22][20]. Addressing small issues before they turn into major problems not only saves money but also prevents costly repairs during turnover.
For example, Petrucci Residential has implemented a proactive maintenance schedule, conducting tasks like HVAC filter replacements and hot water heater cleanings four times a year [12]. Similarly, pre-move-out inspections can identify repair needs early, giving tenants the chance to handle minor fixes themselves, which lowers costs [12].
Keeping tenants happy and renewing their leases is the most effective way to avoid turnover costs altogether. Michael Zaransky, managing principal of MZ Capital Partners, highlights the importance of retaining tenants:
"Renewals are the best way to avoid turnover costs and loss of rents between leases... In addition, a renewed resident that has a history of paying rent on time, without issues, is a known factor as opposed to a new person without a payment history at the property." [12]
Since maintenance issues account for 40% of renter dissatisfaction [21], providing responsive service is critical. Digital maintenance tracking systems can help streamline communication and speed up response times [20]. Quick and reliable maintenance not only keeps tenants satisfied but also encourages lease renewals [19].
Speeding up the turnover process is another key strategy for reducing costs.
Faster Turnover Processes
Minimizing vacancy periods is essential for controlling expenses. For instance, UDR, which manages 55,000 units, estimates that each day a unit remains vacant costs them around $1.5 million [6]. By focusing on efficiency, UDR has managed to maintain a "make-ready" timeline of about 14 days [6].
Proper scheduling can also prevent costly delays. Staggering move-out dates throughout the month helps maintenance teams avoid being overwhelmed, reducing the need for overtime or rush fees [6]. This approach ensures that quality standards are maintained without driving up costs.
In-house resources can further streamline operations. Petrucci Residential, for example, has a pre-arranged agreement with Sherwin-Williams for paint, which cuts costs and prevents delays [12]. Keeping materials like paint and repair supplies on-site also reduces downtime, allowing for immediate repairs and faster unit turnover [12].
Tracking performance metrics is another way to improve efficiency. Monitoring key indicators like "days vacant" and setting maintenance standards can help identify bottlenecks and hidden costs [6][12]. By analyzing these metrics, property managers can make data-driven decisions to speed up the process.
Using Industry Resources
Beyond internal efforts, leveraging external resources can also help reduce turnover costs. Building strong vendor relationships is one way to streamline operations. Scott Mercado, director of maintenance for The Breeden Co., emphasizes this point:
"Relationships are a key point of what I do to operate a property efficiently." [12]
A great example of this is how The Breeden Co. managed to quickly turn over a unit previously occupied by a hoarder at their Red Knot at Edinburgh community in Chesapeake, VA. By relying on their established vendor network, they minimized rent loss through rapid action [12].
Technology can also play a big role in reducing administrative work. Tools that automate maintenance tracking and scheduling free up staff to focus on higher-priority tasks while ensuring nothing gets overlooked [20].
Additionally, platforms like Big Multifamily Vendors provide directories of vetted contractors, making it easier for property managers to find qualified professionals quickly. These resources save time, reduce risks, and offer access to community insights, allowing managers to adopt proven strategies from their peers.
Key Points for Multifamily Professionals
Managing turnover costs is a crucial part of ensuring profitability for large multifamily communities. With turnover expenses averaging nearly $4,000 per unit, these costs can quickly add up to millions annually for large portfolios [1]. For instance, a portfolio with 2,500 units could face turnover expenses of $3.125 million each year [24]. Adding to this, the cost of an eviction - factoring in unpaid rent and legal fees - averages $7,685 [2].
Retention plays a major role in reducing these expenses. While the average retention rate stands at 60% [2], some companies aim for rates above 70%, though only 10% achieve this goal [2]. Each renewal can save between $3,000 and $5,000 in turnover-related costs [23], and a retained resident contributes nearly $900 annually beyond their rent payments [17].
Communication and Maintenance: The Cornerstones of Retention
Good communication is essential. Responsive and effective communication has been shown to significantly reduce renter turnover. Interestingly, property managers often misjudge why renters leave [2]. With over 60% of customer turnover being preventable, staff performance emerges as the most critical factor [17]. Properties that meet communication response time standards see 70% of renters recommending them to others [17].
Maintenance quality also plays a pivotal role. Poor maintenance is a frequent source of renter dissatisfaction, while properties with high maintenance standards retain tenants for 50% longer on average [17]. Additionally, companies with lower retention rates are twice as likely to encounter delinquency rates exceeding 10% [2].
Small Changes, Big Savings
Even minor adjustments can yield significant financial benefits. For example, reducing the average vacancy period by just five days saves $200–$250 per unit in lost rent [24]. On a 100-unit property, increasing retention by 5% could prevent five turnovers annually, saving approximately $12,500 per year [24]. Strategic investments in amenities not only reduce tenant turnover by 22% but also allow for a 7% increase in rental rates [17].
Finally, digital tools are proving to be game-changers in turnover management. They help streamline processes, cut direct costs, and reduce vacancy periods, turning small operational improvements into meaningful savings.
FAQs
What are the best strategies for reducing apartment turnover costs in large multifamily communities?
Reducing apartment turnover costs in large multifamily communities hinges on a thoughtful approach centered around tenant satisfaction and proactive property care. The first step? Prioritize resident retention. Building strong relationships and delivering excellent customer service can go a long way in encouraging tenants to renew their leases. When residents feel valued and heard, they're less likely to move out. Regular check-ins and addressing maintenance concerns quickly also help prevent frustration from building up.
Another effective strategy is implementing preventive maintenance programs. Keeping units in good shape over time can significantly cut down on the need for costly repairs during turnovers. On top of that, consider offering perks like loyalty rewards for on-time rent payments or lease renewals - small incentives can make a big difference in encouraging tenants to stay longer. Finally, screening tenants thoroughly at the beginning can help ensure stable, long-term residents, reducing the frequency of turnovers.
By focusing on tenant happiness and staying ahead of property upkeep, property managers can save on turnover costs while keeping units occupied.
How can property managers reduce apartment turnover costs by improving tenant retention?
Reducing turnover costs begins with effective tenant retention strategies. For larger multifamily communities, building a sense of connection among residents can make a big difference. Hosting events, organizing social activities, and encouraging neighbors to bond can create an emotional connection to the community.
It's also crucial to focus on open communication and offer personalized services that address tenants' specific needs. Incentives for lease renewals, prompt attention to maintenance requests, and thoughtful upgrades to units when needed can significantly boost tenant satisfaction. These efforts not only improve the living experience but also help reduce the financial burden of frequent turnovers.
How do regional factors and the size of a property affect apartment turnover costs?
Regional market dynamics and the size of a property heavily influence apartment turnover expenses. In cities like New York or Los Angeles, where demand is high and competition is fierce, costs for labor, materials, advertising, and renter concessions naturally climb. These areas often experience higher turnover rates, which adds to the financial strain. Local economic trends and the level of rental demand further shape these expenses.
For larger properties with 300 or more units, turnover costs can escalate quickly. This is due to the sheer volume of repairs, cleaning, and marketing efforts required. That said, larger properties may sometimes benefit from economies of scale, which can help lower the per-unit cost. Ultimately, the financial impact of turnovers depends on a mix of regional market factors and the size of the property.
