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Rental Turnover Costs | International Residential Real Estate Investors Association
Monday January 22nd 2018

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Rental Turnover Costs

The following blog from multifamily insiders is really good food for thought.  I think readers should consider the context of some of the costs.  For example, leasing agent costs are easy to assume as costs you would endure whether the resident moved out or not.  But is that true?  If you chose the right property in the right location, you may be able to assume almost negligible leasing agent costs.  In turn, this would create significant additional value.  The same may be true of other elements based on improving your purchase with the right qualifiers.

I would add that I believe this table is accurate.  And as I’ve noted above, I think that some elements may be much more controllable than our first reaction might be.  Because of this giving this serious thought is a worthwhile exercise.

From Multifamily Insiders

In my last post, I made the bold claim that every time a resident chooses not to renew his or her lease, it costs the property an average of $4300. One reader asked me to break down the $4300 cost, and I thought that was an excellent opportunity for all of us to compare some notes. I have just updated all our figures, and the economic landscape has improved… a bit. Based on national average rent and concession data from Axiometrics, turnover costs have dropped to just over $4000 per move out – still quite painful! Here’s the breakdown:

Obviously, different markets are experiencing different average rental rates, different concessions, different vacancy loss days, etc. But this gives a starting point to begin evaluating what the true cost of turnover is for your community.

I went through this exercise with a group in the Orlando, Florida area and a group in the Rochester, New York area recently. Two very different markets, but with surprisingly similar turnover costs. Each group calculated turnover costs ranging from $2700 to $4000 per move-out.

What turnover costs have been overlooked here? Over stated? Under stated? 

Jen Piccotti is the VP Consulting Services for SatisFacts Research, the experts in resident feedback and retention programs. www.SatisFacts.com

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