Tenant turnover has a huge impact on your bottom line.
Research by the National Apartment Association (NAA) has shown that each move-out costs over $4,000. Why not save that money and increase proﬁts by encouraging good tenants to stay?
Vacancies impact your operating budget. Every time a tenant moves out for an avoidable reason, you have the upfront vacancy loss of 4-8 weeks of rent. Once you factor in the concessions (maintenance costs, utilities, taxes), you’re already easily lost about 2 month’s worth of rent.
The existence of vacant space can signiﬁcantly impact your proﬁts. Turnover costs include loss of rent payments, unit repairs, and other hard costs that can amount to over $4,000. You can see the breakdown in the Instead of marketing towards new tenants, focus time and energy retaining existing residents.
The Cost of a Vacancy chart above, is based on national average 1 Bedroom rent. All these costs add up fast! Retaining tenants will save you from these expenses, protect your revenue, and reduce the negative impact on your operating budget. Instead of marketing towards new tenants, it’s worth it to focus time and energy retaining existing residents. To do this, you’ll need to focus on increasing their level of satisfaction – tenants who value your service will be reluctant to deal with the hassle of relocation.
Stay tuned for More On the Economics of Rental Retention and How Keeping Residents Happy Drives Profit. In Future Newsletters, we’ll break down more on the economics behind tenant retention and look at how applying strategies to reduce turnover will have a positive impact on your profits, operating budget, and long-term success as a rental property manager.