Apartment turnover is a fact of life, but taking steps to minimize it through a focus on resident retention can save tens of thousands of dollars a year.
In a recent post on her blog Property Management Minutes, Lori Hammond breaks down turnover costs, which include lost rent and costs related to marketing the unit, screening potential residents, cleaning and repairing the unit and potential capital expenses for planned upgrades. She estimates a single move-out can cost $1,000 to $5,000, depending on upgrades.
For a 225-unit apartment community with a 40 percent turnover rate, that means 7.5 move-outs per month. Applying an average of $1,800 in turnover costs per unit, this community has an annual turnover expense of $162,000.
But if that apartment community could reduce turnover by one move-out per month, it would reduce annual turnover costs by more than $20,000 and return 96 hours to the maintenance schedule, according to Hammond.
Reducing turnover means committing to a strong and ongoing focus on resident retention. “Resolving resident frustrations throughout the year can prevent an accumulation of small concerns that roll up into a ball of frustration, providing the momentum for a resident to start investigating other housing options instead of renewing in their current home,” Hammond writes.