THE COST OF A REPLACING A RESIDENT? WHAT’S THAT NUMBER?

As I was reading some old blogs I ran across one where the conversation revolved around the value of retaining existing residents. One of the points that was in the center of that conversation was the cost of loosing and replacing a resident.

Here are my questions:

Is it accurate that it costs about $4,500 more to replace a lease than to renew?

Is it accurate that the average turnover is 60% in an apartment community?

Both these numbers seem high to me (as an outsider) and they certainly show a tremendous opportunity for apartment communities to improve NOI by either lowering acquisition cost of a new resident or increasing the renewal rate. Even a 1% or 2% improvement can be a huge impact to the net profitability of a community.