Because of the length of my response, I will post in multiple comments.

Good questions and answers are not standard with either one of them. Let's address cost to lose a resident and the areas that must be worked into the calculation.
1. What is your average length of vacancy on an apartment and what is your lease value. This may vary depending on floor plan. Let's say you have 1,2,and 3 bedroom plans and overall (just to simplify) your average vacancy on any apartment size is 60 days (two months for ease of calculation) and your average rents are $900. You can see we can assertain your vacancy loss number is $1,800. I would use current average vacancy over the last 90 days, as we all know seasonality and other factors have impact your number. Your vacancy loss may also fluctuate considerably depending on the time of the year and changing market conditions.
2. What are the base costs of turning an apartment? This is the next part of the equation and should include painting, cleaning, carpet cleaning, general supplies (i.e. drip pans and other items not considered damage). If you have $250 to paint (including supplies), $50 for cleaning, $50 for carpet cleaning, and $25 for supply costs, your total base costs will be $375.

End of post 1

I agree that it is a number that has too many variables; but I think it is important information to have when for formulating annual budgets. It is also useful to have when faced with a situation where a current resident has an actual complaint about an aspect of their apartment; i.e. do I spend $500 to replace the carpet for a new resident who has a stain that was not completely removed from the previous resident; or do I risk having to spend over $3000 to turn that same unit? Or do I choose to replace the carpet for someone who has been with the property a long time when they renew, instead of simply cleaning the carpet?

I have always felt that it is easier and costs less to keep current customers/residents happy than it is to try to capture new ones.

When considering reasons that residents can have that force them to move; they fall into 2 categories:

1)Lifestyle changes; these include (but are not limited to): changes in employment status/location, change in household size (loss of a household member, or the addition of one so that they exceed occupancy standards you cannot support), or the purchase of a home. These changes need to be accepted by managemnet as not within their control.
2) CUSTOMER SERVICE; these are issues that are completely within the realm of management's control, whether it be something that should have happened and didn't, or something that did happen and shouldn't have.

Once I understood that, it was like an 'A-Ha!' moment and everything else fell into place.

Hi Frederic - I think it is great you are asking these questions and challenging these numbers. It's important to get a gut check every now and again. I think Lawrence did a fantastic job in addressing the cost of turnover question. Regarding the question of the average turnover being 60% at the average apartment community - this figure comes from the annual NAA Income and Expense survey. If you look back of the last several years, the average turnover fluctuates between 57% and 62%. This is why it's so critical to focus on retention because we are one of the few industries that finds it acceptable to replace nearly two-thirds of our customers every year!

Great responses and follow up by Frederic, Jen, and Johnny. I agree totally in the thought it is less expensive and better to try and keep a resident than lose them. They have a marginal carpet, have been a great resident, and that costs me $1,000 to keep them and I would have to replace at turn. YOU BET! Here is a thought. Why do we focus so much on the leasing aspect when we should be putting more emphasis on resident retention? Result is higher income, lower expenses, improved NOI. DAH!

To your question of the cost of resident retention. If your cost for renewal is lower then the cost of a turn and they were going to move, you are ahead of the game. Please communicate with your team the cost of turnover, and with them make sure they understand the time aspects for them to turn and lease the apartment. It all follows working smarter and not necessarily harder theory. You ask about the cost of a renewal and the cost of a new lease. The cost of a new lease is basically what we discuss before, easily over $3,500 if not more. The cost of a renewal...priceless!

Oh, I forgot. Read Jen's blog on The Truth about Retention in THIS Economy. Really good job Jen. Touches on some of what we have been talking about and more.

@Frederic;

Yes, the first category of reasons 'is what it is'; I only broke down the 2 groups because it is important to understand the difference between the two. If a resident chooses to leave and you are able to determine that it IS because of a reason falling into the second group, realize it is a test and an opportunity for you to delve deeper and resolve the issue; perhaps convincing the resident to rethink his plans and rescind his notice.