If the property goes vacant, you may have to pay a $500 lease up fee, have a month of vacancy worth $1,000, plus do some improvements such as painting ($500-$1,000). The turnover could cost you$2500, while decreasing the rent by $100/month only costs you $1200 over the course of a year.
People also ask
What is turnover in real estate?
Real estate agents, brokers, or homeowners use real estate turnover to determine the property turnover in an area over a certain period of time.
How much does it cost to turnover an apartment?
The average apartment turnover cost is around $1,750 per month, but that number could drastically differ depending on what your property costs, where it is located, and how much work needs to be done. Generally speaking, these are some of the most common costs that can be associated with apartment turnovers:
What are the costs associated with turnover?
In HR, we can separate the costs associated with turnover into indirect costs and direct costs. Direct turnover costs include the cost of leaving, replacement costs, and transition costs, while indirect turnover costs include the loss of production and reduced performance. The following are some examples of turnover costs (Maertz Campion, 1998):
How does turnover affect your rental property profit margin?
Every month that your property sits vacant is a month of losses, and those losses are going to have a big effect on what your overall profit margin is when you check your bottom line. Turnover rate plays a huge factor in how much money you make in the rental business.