Most New Investors Underestimate Property Turnover Costs.

Real Estate Broker · Cleveland, OH · Member since 2016 · 146 posts · 110 votes

Most new investors underestimate turnover costs.

Everyone talks about buying the property, collecting rent and cashflow but few people talk about what happens when a tenant moves out. And that’s where reality hits a lot of investors. No one discusses vacancy time, the utility bills while the unit sits empty. The maintenance issues the tenant never reported, contractors delaying projects, marketing costs, paying lease commissions, inspection costs or carrying the mortgage while no rent is coming in. Let’s discuss these major concerns.

What’s been your most expensive turnover expense so far? And how did you handle the situation?

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Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes

2mo

This is why renewing a lease is MORE important than how much any increase is.

A landlord should increase rent a minimum of every two years though (unless local market rents are dropping).

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Denise SuppleeBusiness Member
Realtor · Willow Grove, PA · Member since 2017 · 998 posts · 648 votes
2mo
I agree. After many years of managing rentals, I have come to understand that vacancy and getting a property ready for the next tenant are usually the biggest expenses. That's one of the reasons I always appreciated good long-term tenants. Keeping a good tenant was often much less expensive than dealing with turnover.
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- R. Elle Berry
  OP
  Real Estate Broker · Cleveland, OH · Member since 2016 · 146 posts · 110 votes
  2mo
  Quote from @Denise Supplee:
  
  I agree. After many years of managing rentals, I have come to understand that vacancy and getting a property ready for the next tenant are usually the biggest expenses. That's one of the reasons I always appreciated good long-term tenants. Keeping a good tenant was often much less expensive than dealing with turnover.
  I couldn’t agree more. Good long-term tenants are often one of the best ways to reduce operating costs. A lot of new investors focus on maximizing rent, but they sometimes overlook the value of tenant retention. A reliable tenant who communicates and takes care of the property can easily save thousands in turnover, vacancy, and make ready expenses over time.
  
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
2mo
This is why renewing a lease is MORE important than how much any increase is.
A landlord should increase rent a minimum of every two years though (unless local market rents are dropping).
[email protected]248-209-6824
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- R. Elle Berry
  OP
  Real Estate Broker · Cleveland, OH · Member since 2016 · 146 posts · 110 votes
  2mo
  Quote from @Drew Sygit:
  
  This is why renewing a lease is MORE important than how much any increase is.
  A landlord should increase rent a minimum of every two years though (unless local market rents are dropping).
  That’s a great point. Consistent rent adjustments can make renewals feel more predictable for tenants instead of surprising them with a large increase after several years. I also think the conversation during renewal is just as important. Sometimes a slightly lower increase that keeps a quality tenant is more profitable than pushing for top market rent and facing a month or two of vacancy. Great point Drew.
  
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Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
2mo
Most of the stuff that really is quickly to be torn out is the landscape by pets. I have had many tenants and properties that we manage that the pets get outside and turn the backyard to dirt. I have had these things costs thousands just after being in the house for 6-7 months, or even 12 month lease and then move out. These are the quickest way to eat up costs is the pets that come with the tenants. Even if the tenants check out great and everything is 10s across the board, one bad pet can cost the homeowner thousands of dollars!
I had one renter that moved into a place I own about 5 years ago. They sold the place they had, and then wanted to rent for 2-3 years per them to get settled (first mistake). Never think that people netting a lot of money from a house sale and wanting to settle for a bit will stay for a long time. 6-7 months later they told me, we are out! Left and we assessed the backyard, and there was 4K worth of stuff that needed to be done to get the backyard back to what it was before they lived there.. Only 6-7 months, their dog really had the last laugh.. If you can, and within the laws, try to stay away from pets.
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- R. Elle Berry
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  Real Estate Broker · Cleveland, OH · Member since 2016 · 146 posts · 110 votes
  2mo
  Quote from @Peter Mckernan:
  
  Most of the stuff that really is quickly to be torn out is the landscape by pets. I have had many tenants and properties that we manage that the pets get outside and turn the backyard to dirt. I have had these things costs thousands just after being in the house for 6-7 months, or even 12 month lease and then move out. These are the quickest way to eat up costs is the pets that come with the tenants. Even if the tenants check out great and everything is 10s across the board, one bad pet can cost the homeowner thousands of dollars!
  I had one renter that moved into a place I own about 5 years ago. They sold the place they had, and then wanted to rent for 2-3 years per them to get settled (first mistake). Never think that people netting a lot of money from a house sale and wanting to settle for a bit will stay for a long time. 6-7 months later they told me, we are out! Left and we assessed the backyard, and there was 4K worth of stuff that needed to be done to get the backyard back to what it was before they lived there.. Only 6-7 months, their dog really had the last laugh.. If you can, and within the laws, try to stay away from pets.
  Peter, that’s a perfect example of why pet screening is just as important as tenant screening. Many landlords budget for interior wear and tear but forget how quickly landscaping can become a major expense. A $4,000 yard restoration after only six months is a tough lesson. It really shows why every property has its own risk factors and why landlords need to account for those costs when evaluating cash flow.
  
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Scott ButlerBusiness Member
Mid Missouri · Member since 2024 · 7 posts · 1 vote
2mo
Our biggest turns usually involve unreported maint issues...they let it ride until they move out...we start the turn process and lo and behold...water, mold or some other significant damage...these were in properties where we inherited the tenant and their lease...when we took over we do post move in 90 inspection and prior to offering a renewal we do another inspection to see how the tenants are keepin the place. Right now the most expensive on we've had is sitting around $13K due to said water/plumbing (non-reported) issues.
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- R. Elle Berry
  OP
  Real Estate Broker · Cleveland, OH · Member since 2016 · 146 posts · 110 votes
  2mo
  Quote from @Scott Butler:
  
  Our biggest turns usually involve unreported maint issues...they let it ride until they move out...we start the turn process and lo and behold...water, mold or some other significant damage...these were in properties where we inherited the tenant and their lease...when we took over we do post move in 90 inspection and prior to offering a renewal we do another inspection to see how the tenants are keepin the place. Right now the most expensive on we've had is sitting around $13K due to said water/plumbing (non-reported) issues.
  $13,000 is exactly the type of expense many first-time investors never factor into their numbers. Unreported maintenance can turn what might have been a simple repair into a major renovation. I really like your approach of performing a 90 day inspection and another inspection before renewal. Those proactive inspections not only protect the property but also create opportunities to remind tenants to report maintenance issues before they become costly problems. Great tips Scott, thank you.
  
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David Krulac
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
2mo
I've saying it for years. Vacancies are overlooked and minimized to the owner's loss. Vacany and turnover are big loss generators. The collarary is that long term tenants are gold.
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- R. Elle Berry
  OP
  Real Estate Broker · Cleveland, OH · Member since 2016 · 146 posts · 110 votes
  2mo
  Quote from @David Krulac:
  
  I've saying it for years. Vacancies are overlooked and minimized to the owner's loss. Vacany and turnover are big loss generators. The collarary is that long term tenants are gold.
  I completely agree. Vacancy is one of those ‘hidden expenses’ that doesn’t always show up in a deal analysis, but it can quickly erase months of cash flow. Long term tenants who pay on time, communicate, and take care of the property are often worth far more than squeezing out the highest possible rent.
  
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Jim Johnson
Real Estate Agent · Memphis · Member since 2026 · 585 posts · 346 votes
2mo
Turnovers are almost always more expensive than people expect, especially if deferred maintenance starts showing up after move-out. In my experience, the biggest cost isn't always the repairs themselves—it's the time the property sits vacant.

Having a standardized turnover process, trusted vendors, and getting the next resident lined up as early as possible can make a huge difference. Every extra week of vacancy tends to cost more than most owners budget for.
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- R. Elle Berry
  OP
  Real Estate Broker · Cleveland, OH · Member since 2016 · 146 posts · 110 votes
  2mo
  Quote from @Jim Johnson:
  
  Turnovers are almost always more expensive than people expect, especially if deferred maintenance starts showing up after move-out. In my experience, the biggest cost isn't always the repairs themselves—it's the time the property sits vacant.
  
  Having a standardized turnover process, trusted vendors, and getting the next resident lined up as early as possible can make a huge difference. Every extra week of vacancy tends to cost more than most owners budget for.
  Jim,
  Well said. Time is often the most expensive part of a turnover. Every additional week the property sits vacant means lost rent while the owner is still paying the mortgage, taxes, insurance, and utilities. Having a standardized turnover process and reliable vendors can make all the difference in reducing downtime and protecting cash flow.
  
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Ismael El Hamdouchi
Member since 2025 · 68 posts · 28 votes
2mo
I think turnover costs are often underestimated because people focus on the purchase and projected rent but don’t build enough reserves for the periods between tenants. Even a short vacancy can become expensive once you factor in cleaning, repairs, marketing, utilities, and leasing costs.

One thing I’ve noticed is that conservative assumptions usually outperform optimistic ones over the long run. If the numbers still work after accounting for vacancies and turnover, it’s generally a much stronger investment.

Curious what percentage of annual rent other investors here typically budget for turnover and maintenance.
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- R. Elle Berry
  OP
  Real Estate Broker · Cleveland, OH · Member since 2016 · 146 posts · 110 votes
  2mo
  Quote from @Ismael El Hamdouchi:
  
  I think turnover costs are often underestimated because people focus on the purchase and projected rent but don’t build enough reserves for the periods between tenants. Even a short vacancy can become expensive once you factor in cleaning, repairs, marketing, utilities, and leasing costs.
  
  One thing I’ve noticed is that conservative assumptions usually outperform optimistic ones over the long run. If the numbers still work after accounting for vacancies and turnover, it’s generally a much stronger investment.
  
  Curious what percentage of annual rent other investors here typically budget for turnover and maintenance.
  Ismael, I like your point about conservative underwriting. I think many investors make the mistake of underwriting for the best case scenario instead of the most likely one. If a property still cash flows after factoring in vacancy, turnover, maintenance, and capital improvements, it’s usually a much stronger investment. I’m curious to see what others budget as well because I know it varies by market and property type.
  
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Tryn Mesarch
Real Estate Broker · UT · Member since 2024 · 7 posts · 2 votes
2mo
I would say my most expensive was a section 8 housing family that moved out and truly did a number on the home. While living in the home and when issues arised there was always an excuse. After 1.5 years of me managing the home and 1 renewal later, I finally told the owner that we should not renew the lease to do some well needed work and find new tenants that would not be so hard on the home. New quartz countertops that were installed 2 months prior to move out were cracked all over, HVAC system was toast due to lack of care, even though we delivered enough filters for 2 years and sent out monthly reminders. We even did our biannual inspections where we personally replaced filters, and sent in HVAC techs to do annual cleanups. It was $25k of repairs from the yard, to the mechanical systems, to harsh wear and paint. Not a great experience when repairs alone took an entire month to complete.
Fortunately this was a seasoned investor. However, new investors are always amazed by simple policies to keep the house in good condition and achieve top rents like repainting every 7ish years, replacing flooring every 8ish years, etc.
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- R. Elle Berry
  OP
  Real Estate Broker · Cleveland, OH · Member since 2016 · 146 posts · 110 votes
  2mo
  Quote from @Tryn Mesarch:
  
  I would say my most expensive was a section 8 housing family that moved out and truly did a number on the home. While living in the home and when issues arised there was always an excuse. After 1.5 years of me managing the home and 1 renewal later, I finally told the owner that we should not renew the lease to do some well needed work and find new tenants that would not be so hard on the home. New quartz countertops that were installed 2 months prior to move out were cracked all over, HVAC system was toast due to lack of care, even though we delivered enough filters for 2 years and sent out monthly reminders. We even did our biannual inspections where we personally replaced filters, and sent in HVAC techs to do annual cleanups. It was $25k of repairs from the yard, to the mechanical systems, to harsh wear and paint. Not a great experience when repairs alone took an entire month to complete.
  Fortunately this was a seasoned investor. However, new investors are always amazed by simple policies to keep the house in good condition and achieve top rents like repainting every 7ish years, replacing flooring every 8ish years, etc.
  $25,000 is a painful reminder that even thorough management doesn’t eliminate every risk. It also highlights why routine inspections and documentation are so important, not just to identify issues, but to show owners you’re being proactive. I also appreciate your point about planning for capital replacements. Many new investors treat items like paint, flooring, HVAC systems, and landscaping as unexpected expenses when, in reality, they’re part of the long term cost of owning rental property. Budgeting for those from day one leads to much more realistic expectations. Thanks for your comment Tryn.
  
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
2mo
Quote from @R. Elle Berry:

Most new investors underestimate turnover costs.

Everyone talks about buying the property, collecting rent and cashflow but few people talk about what happens when a tenant moves out. And that’s where reality hits a lot of investors. No one discusses vacancy time, the utility bills while the unit sits empty. The maintenance issues the tenant never reported, contractors delaying projects, marketing costs, paying lease commissions, inspection costs or carrying the mortgage while no rent is coming in. Let’s discuss these major concerns.

What’s been your most expensive turnover expense so far? And how did you handle the situation?

It's awesome that you responded to everyone posting their advice/thoughts, but you know there's also a " x Votes" hyperlink in the bottom left corner of each response?
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Janice Carter
Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 607 votes
2mo
@R. Elle Berry I agree. Many new investors focus only on the purchase price and monthly cash flow but turnover costs can quickly eat into profits. In my experience, the biggest expenses are often painting, flooring and extended vacancies. That is why it is so important to thoroughly screen tenants and do everything possible to retain good tenants.
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