Turnover and vacancy cost more than repairs: how we think about it

General Landlording & Rental Properties
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Turnover and vacancy cost more than repairs: how we think about it

Rosina Persaud
Member since 2023 · 87 posts · 14 votes

At our shop, we do not argue about a repair bill before we do the vacancy math.

We operate 236 doors in Memphis, mostly single-family and heavy Section 8. On a 3BR+ home renting for $1,395 to $1,950, every vacant week is about $325 to $455 in rent you will never get back. Stretch a turn by a month and you have lost a full month's rent, before you count the turn work itself. That is why we say turnover and vacancy cost more than repairs.

Our rent-ready turnovers run on a 21-day scheduling system. The date is set up front, the work is sequenced around it, and we do not wait until something breaks to find people — our contractors are found and tested months before, in small paid steps, so we know who will actually show up.

Practical takeaway: price the empty days first, then decide on repairs. A cheaper repair that adds two vacant weeks is not cheaper.

Landlords — when you budget a turn, do you count vacant days as a real cost or only the repair invoices, and how many vacant days do you usually assume?

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  • Michele FischerPro Member
    Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
    1w

    Interesting topic. I'm realizing that the stats I collect can't answer that question. I collect monthly uncollected rent, but in dollars not days, and for all reasons, not just moveouts/turnover days. Prepandemic I was averaging about $190/moveout in uncollected rent if I assume all uncollected rent was due to issues that led to a turn. We self managed then and were keenly aware that every empty day was costing us cash.

    Since the pandemic a lot has changed - we no longer self manage, so it is unusual for a turn to take less than a month (but usually not mroe either), there is less of a mindset that paying rent is necessary, there is less ability to evict, and rents are a lot higher.

    Our uncollected rent is up, our turns are down, the average is now $1200/moveout. But, this includes uncollected rent while we are trying to get a non-paying tenant out and the empty turnover days. Overall profilt is up, though, which is a sad commentary on why rent is skyrocketing; everyone is paying more given the new anti-landlord environment.

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    • Rosina Persaud
      OP
      Member since 2023 · 87 posts · 14 votes
      1w

      Michele, the dollars-versus-days gap you named is exactly where most owners lose the thread. Uncollected rent and vacant days are two different leaks, and lumping them hides both. What fixed it for us was tracking three separate numbers on every move-out: rent still owed, the turn invoice total, and days from keys back to keys out — then pricing those days at the house's actual rent. On a 3BR+ here at $1,395–$1,950, one vacant week is roughly $325–$455 gone before a single invoice. Once the days carry a dollar figure of their own, a turn that takes a month stops looking normal, and the 21-day schedule has something real to answer to.

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  • James JonesPro Member
    Investor · Collierville, TN 38017 · Member since 2017 · 926 posts · 637 votes
    1w

    Real cost, and it's the first number we price, not the last. On a 3BR+ Memphis house renting for $1,395 to $1,950, a vacant month is a full month's rent gone before you pay a single invoice — and then the turn work, utilities, and leasing costs land on top of it. So every turn gets budgeted two ways: the repair scope, and the days offline to get it rent-ready, shown, screened, and through inspection. On Section 8 houses that inspection is the swing factor; pass the first time and the timeline holds, fail it and you just bought yourself more empty days. A cheaper repair that adds a week of vacancy is not cheaper. Price the empty days first and the repair decisions get a lot simpler.

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  • Sajjad R.
    Real Estate Consultant · WY · Member since 2023 · 19 posts · 6 votes
    5d

    Totally agree, pricing the empty days first changes every repair conversation. The other spot we see days leak is after the unit is ready, when leads go quiet after one or two tries. We keep calling and texting those for 10 days, and a quick call after every showing to answer questions and send the application link saves more days than people expect. Do you track rent ready to signed lease separately from the turn itself?

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  • Simon W.Business Member
    Real Estate Consultant · Lehigh Valley PA & New York City · Member since 2013 · 1k+ posts · 687 votes
    5d

    Michele's dollars versus days gap is real, and the books can track both. Lost rent doesn't appear anywhere as an expense, so I'd run a simple per-unit schedule of scheduled rent versus collected rent, and the difference is your vacancy and uncollected rent number.

    Using Rosina's numbers, a $1,500 house sitting 21 days is about $1,050 of rent that never hits the books. A $600 turn invoice on top makes that turn cost closer to $1,650 all in, even though the books only show the $600.

    I'd also keep turn invoices separate from improvement work on the same unit, since the first is generally expensed and the second may need to be capitalized. Then budget off your actual average per turn, not a guess.

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  • Rachel Mazzanti
    Virtual Assistant · Remote · Member since 2020 · 128 posts · 52 votes
    5d

    Pricing the empty days first is exactly right, and it is the part most owners skip when they budget a turn. The repair invoice is easy to see. The lost rent is not, because it never shows up as a bill. The way we handle it in my company is to track three numbers on every move-out, and keep them separate. Days vacant, rent per day, and the turn invoices. Then the lost rent gets its own line on that property's monthly report, right next to the repairs, not buried in them. A turn that cost $1,200 in work and took 30 days on a $1,500 home did not cost $1,200. It cost $1,200 plus $1,500 in rent that will never come back. Once that number is visible, the decisions get simpler. A slightly pricier repair that saves a week of vacancy stops looking expensive, and a property with slow turns stops looking like a good performer just because its repair bills are low.

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    4d

    Why do ALL your numbers match those that @James Jones posts?

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  • Rosina Persaud
    OP
    Member since 2023 · 87 posts · 14 votes
    4d

    Yes — we track them as two separate clocks, and it changed how we read our own numbers.

    The first clock is the turn itself: keys back to rent-ready, which is what our 21-day scheduling system runs on. If that clock slips, it is a scope, sequencing, or contractor problem, and we can see which one.

    The second clock starts the day the unit passes the turnover walk: rent-ready to signed lease. Those are leasing days, not repair days, and they cost the same rent. On a 3BR at $1,395–$1,950, every one of those days is real money, whether the delay came from a wrench or from slow follow-up.

    Lumping them together hides which side owns the problem.

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