Lease Renewal vs. Turnover Cost Calculator

About the Lease Renewal vs. Turnover Cost Calculator

One of the most important financial decisions landlords face is whether to renew an existing tenant (potentially at a discounted rate) or let them go and find a new tenant at market rent. The math often favors renewal because turnover is surprisingly expensive: vacancy loss, cleaning and repairs, marketing, leasing agent fees, and the risk of extended vacancy.

A typical unit turnover costs $2,000–$8,000+ including 1–2 months of lost rent. If you're considering raising rent by $100/month (gaining $1,200/year) but risk losing the tenant, a single month of vacancy ($1,500) wipes out more than a year's worth of the increase.

This calculator compares the net income from renewing at a given rate versus the expected net income from turning the unit and leasing to a new tenant at market rent, accounting for all turnover costs.

Homebuyers, investors, and real-estate professionals all benefit from precise lease renewal vs. turnover cost figures when evaluating properties, negotiating deals, or planning long-term investment strategies. Save this calculator and revisit it whenever market conditions or your financial situation changes.

When This Page Helps

Landlords overestimate the upside of turnover and underestimate its costs. It gives a clear comparison showing that moderate rent increases with retention almost always beat turnover.

How to Use the Inputs

1. Enter the current monthly rent and proposed renewal rent.
2. Enter the market rent for a comparable new lease.
3. Enter estimated turnover costs: vacancy, repairs, marketing, leasing fees.
4. Enter the expected vacancy period in months.
5. View the net income comparison for the next lease term.
6. Decide whether renewal or turnover produces better returns.

Example Calculation

Tips & Best Practices

• Always calculate the full cost of turnover before deciding not to renew a tenant.
• Good tenants have intangible value: they maintain the unit, pay on time, and reduce your management burden.
• Offer a modest rent increase (2–4%) at renewal — most tenants accept if it's below market.
• If the tenant is problematic (late payments, damage, complaints), turnover may be worthwhile despite the cost.
• Include opportunity cost: time spent on showings, screening, and onboarding is your time or your manager's.
• In tight rental markets, turnover risk is lower because you'll fill quickly; in soft markets, retention is paramount.

The Math Favors Retention

On a $1,500/month unit, one month of vacancy costs $1,500. Add $2,000 in turnover costs and the total is $3,500. To justify that loss, a new tenant must pay $292/month more ($3,500 / 12 months) than the renewed tenant's rent. Most landlords can't get that large a premium.

Intangible Benefits of Retention

Good tenants maintain the property, report issues early (preventing major damage), and require less management time. These benefits don't show up in the math but reduce your long-term costs and stress.

When Turnover Makes Sense

Turnover is justified when: the tenant is significantly below market (15%+), you need to renovate the unit to upgrade it to a higher rent tier, the tenant has a history of problems, or the market is so hot that vacancy is near zero and you'll fill immediately.

Frequently Asked Questions

• How much does tenant turnover actually cost?

  Total turnover cost typically ranges from $2,000 to $8,000+. This includes: vacancy loss (1–2 months), painting and cleaning ($500–$1,500), minor repairs ($200–$1,000), marketing ($100–$500), and leasing agent fees (50–100% of one month's rent). Higher-end units cost more to turn.

• Is it always better to renew?

  Not always. If the current tenant is significantly below market (10%+), the unit needs substantial updating, or the tenant is problematic, turnover may be justified. But for good tenants within 5–7% of market, renewal almost always wins financially.

• How much rent increase should I ask at renewal?

  Aim for 2–5%, ideally bringing the tenant closer to market without exceeding it. Increases above 7–10% trigger tenant shopping behavior. If you need a larger increase, consider phasing it over 2 renewals.

• What if the market has dropped and my tenant is overpaying?

  Proactively offering a modest rent decrease (5%) builds loyalty and prevents the tenant from realizing they're overpaying. Losing a tenant in a soft market means even longer vacancy, amplifying turnover costs.

• Should I factor in leasing agent commissions?

  Absolutely. Leasing agents typically charge 50–100% of one month's rent for placing a new tenant. On a $1,800/month unit, that's $900–$1,800 — a significant cost that doesn't exist with renewal.

• How far in advance should I approach renewal?

  Start the renewal conversation 60–90 days before lease expiration. This gives both parties time to negotiate and gives you time to list the unit if the tenant declines. Waiting too long risks unexpected vacancy.