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