The Real Cost of Tenant Turnover: Hidden Expenses Landlords Often Overlook

by Skylar St. Pierre

Tenant turnover is an unavoidable part of owning rental properties. Each time a tenant leaves, landlords face the task of preparing the property for new occupants, which can come with significant expenses. While the loss of rent during vacancy periods is the most obvious cost, there are many other hidden expenses that can quietly drain your rental income.

In this post, we’ll break down the true costs of tenant turnover and offer actionable tips to help you minimize these expenses. Plus, we’ll introduce you to our FREE Tenant Turnover Cost Calculator—a tool that provides a clear picture of what turnover is costing you and how you can reduce it.

1. Vacancy Losses: Income Slipping Through the Cracks

Each day your rental property sits vacant is a day of lost rental income. Vacancy loss can be one of the biggest turnover costs for landlords, especially if it takes weeks or months to find a new tenant. According to Zillow Rental Market Trends, the average time to fill a vacancy can range from a few weeks to over a month, depending on the local market and rental demand. These vacancy periods represent a financial gap that eats directly into your cash flow.

How to Minimize Vacancy Loss:

Start Marketing Early: Begin advertising your rental as soon as you know a tenant will be moving out. Consider offering lease renewals to current tenants at least 60 days in advance to give yourself more time to prepare.
Use Professional Marketing Tools: Listings with high-quality photos, detailed descriptions, and virtual tours attract tenants faster, reducing the time your property remains vacant.

2. Turnover-Related Maintenance and Repairs

Preparing a rental for new tenants often involves cleaning, repairs, and sometimes upgrades. Even minor repairs like repainting walls or replacing carpet can add up quickly. HomeAdvisor reports that deep cleaning a property can cost between $150 and $500, while repainting a unit can range from $200 to $1,000, depending on the size and extent of the work required.

How to Reduce Maintenance Costs:

Plan for Regular Inspections: Conducting routine inspections can help you identify maintenance issues early, preventing larger repair costs down the line.
Budget for Turnover-Related Maintenance: Set aside a maintenance fund specifically for turnover expenses so you’re prepared when they arise.

3. Marketing and Advertising Expenses

To find quality tenants, effective marketing is essential. Posting on popular rental platforms like Apartments.com or Zillow Rental Manager often comes with listing fees, and additional expenses can include professional photography or virtual tour production. These costs can range from $50 to $300, depending on the marketing channels and tools used.

How to Cut Marketing Costs:

Leverage Referrals: Encourage current tenants to refer friends or family, potentially reducing your need for paid advertising.
Utilize Social Media: Platforms like Facebook and Instagram can help spread the word about your listing, often with minimal or no costs involved.

4. Tenant Screening Fees

Once you’ve attracted potential tenants, screening them thoroughly is a necessary step to protect your property. Screening costs can include background checks, credit reports, and eviction history reports. According to TransUnion, tenant screening packages can cost anywhere from $35 to $75 per applicant.

How to Optimize Screening Expenses:

Use an All-in-One Screening Service: Services like MyRental or SmartMove streamline background checks, credit reports, and rental history reports into a single package, saving you time and often reducing costs.
Pre-Screen Applicants: Asking initial qualifying questions, such as employment and income verification, can help you narrow down applicants before paying for screening services.

5. Opportunity Costs: The Value of Your Time

Handling tenant turnover requires time and effort, especially if you’re self-managing your properties. Every hour you spend managing turnover could be spent on other income-generating activities, or simply enjoying your personal time. The Tenant Turnover Cost Calculator helps you quantify this opportunity cost by estimating the hours spent and assigning an hourly rate to your time.

Consider the Benefits of Delegation:

Hire a Property Manager: Property managers handle all aspects of tenant turnover, from marketing to move-in coordination, saving you time and reducing stress.
Automate Where Possible: Use online platforms to streamline tenant communications, rent collection, and maintenance requests, making turnover management more efficient.

Calculate Your Tenant Turnover Costs Now!

Are you ready to see how much turnover is actually costing you? Our Tenant Turnover Cost Calculator helps you identify and quantify each expense associated with tenant turnover, so you can make informed decisions about managing your rental properties. By understanding these costs, you’ll be better equipped to find ways to minimize them and maximize your rental income.

Click here to try the Tenant Turnover Cost Calculator

Reducing tenant turnover costs can improve your property’s profitability and reduce your workload. At Strategic Estates Management Co., we specialize in minimizing turnover-related expenses with comprehensive tenant placement, maintenance coordination, and rent collection services. Contact us today to learn how our 10-month complimentary property management offer can help you save time and money.

Act now, cause this complimentary service is only available to a limited number of clients!