Turnover cost is the total expense of releasing an apartment after a resident moves out, combining make-ready repairs, lost rent during downtime, and marketing and leasing costs. It is measured per unit turned. Operators track it because every avoidable move-out erodes net operating income and every day of vacancy compounds the loss.
What Is Turnover Cost in Multifamily?
Turnover cost is the sum of every expense a property incurs to move one resident out and a new one in. Per a 2023 Zego Resident Experience Management report cited by Multifamily Dive, apartment turnover cost held at about $3,872 per resident, covering advertising, repairs, concessions, and lost rent. It has three main buckets: make-ready, downtime, and re-leasing.
Make-ready is the physical cost of restoring a unit. Multifamily Insiders and industry survey data place mid-market make-ready at roughly $500 to $2,500 per unit, while value-add units needing significant work can run $5,000 to $15,000. Downtime is the rent lost while the unit sits empty. Re-leasing covers marketing, screening, and leasing commissions, often 50 to 100 percent of one month's rent for a new lease.
Cost bucket | What it covers | Representative range |
Make-ready | Paint, clean, repairs, flooring, appliances | $500 to $2,500 mid-market |
Downtime | Lost rent while the unit is vacant | 2 to 6 weeks of rent |
Marketing | Listing fees and advertising | $100 to $500 per vacancy |
Leasing | Commissions and screening | 50 to 100 percent of one month's rent |
Why Turnover Cost Matters
Turnover cost matters because it is a direct, controllable drag on net operating income that retention can reduce. Every avoided move-out saves the full make-ready, downtime, and re-leasing stack, which is why operators facing a wave of new supply prioritize resident retention. Multifamily Dive reports that owners under supply pressure lean on keeping current renters in place.
The operator-side discipline is treating downtime as the largest hidden component. The out-of-pocket make-ready invoice is visible, but the rent lost during days vacant often exceeds it and rarely appears as a line item. A five-day reduction in average days-to-lease across a high-turnover property can save more than a modest cut in make-ready spend, because downtime scales with every turn.
Example
A 200-unit property has 50 percent annual turnover, or 100 move-outs per year. Each turn costs $1,500 in make-ready, plus 21 days of vacancy at $1,600 monthly rent ($1,120 lost rent), plus $600 in marketing and leasing. That is $3,220 per turn, or $322,000 per year in total turnover cost.
Component | Per turn | Annual (100 turns) |
Make-ready | $1,500 | $150,000 |
Lost rent (21 days) | $1,120 | $112,000 |
Marketing and leasing | $600 | $60,000 |
Total | $3,220 | $322,000 |
If a retention program cuts turnover from 100 to 80 move-outs, the property avoids 20 turns at $3,220 each, saving $64,400 annually. At a 5.5 percent cap rate, that recurring saving capitalizes into roughly $1,170,000 of value ($64,400 divided by 0.055), the case for spending on retention.
Variations and Edge Cases
Turnover cost varies widely by unit condition, market, and how a property accounts for downtime, so a single average masks real differences. The table below covers the variants an underwriter confirms before assuming a turnover-cost figure.
Variant | Treatment |
Value-add turns | Renovation-grade make-ready can reach $5,000 to $15,000 per unit |
Downtime accounting | Lost rent is often omitted; include it to capture true cost |
Skips and evictions | Non-payer move-outs add legal cost and higher repair damage |
Concessions | Free rent to fill a unit widens effective turnover cost |
Seasonality | Winter turns lease slower, extending downtime and total cost |
The most common mistake is counting only the make-ready invoice. True turnover cost includes lost rent during downtime and the full re-leasing spend, which together often exceed the physical repair bill and are the reason retention pays.
Turnover Cost vs Tenant Retention Rate
Turnover cost is often confused with tenant retention rate, and they are two sides of the same lease-renewal question. Turnover cost is the dollar expense incurred each time a resident leaves and a unit is released. Tenant retention rate is the percentage of expiring leases that renew, a rate rather than a cost.
The relationship is inverse and multiplicative. A higher retention rate means fewer move-outs, and each avoided move-out removes one full turnover-cost event from the operating statement. Retention rate is the lever operators pull, and turnover cost is the dollar amount that lever moves. One measures behavior, the other measures its financial consequence.
Frequently Asked Questions
How much does apartment turnover cost?Apartment turnover cost was about $3,872 per resident according to a 2023 Zego report cited by Multifamily Dive, covering advertising, repairs, concessions, and lost rent. Make-ready alone runs roughly $500 to $2,500 for mid-market units and $5,000 to $15,000 for value-add renovations.
What is included in turnover cost?Turnover cost includes make-ready repairs, lost rent during vacancy downtime, marketing and listing fees, and leasing costs such as commissions and screening. Downtime is frequently the largest component and is often omitted from make-ready invoices, understating the true cost of each turn.
How does turnover cost affect NOI?Turnover cost is a direct expense that reduces net operating income. Because avoiding a move-out saves the full make-ready, downtime, and re-leasing stack, cutting turnover raises NOI, and at a market cap rate that recurring saving capitalizes into higher property value.
Related Terms
Tenant Retention Rate
Economic Occupancy
Net Operating Income
Vacancy Rate
Replacement Reserves