The Real Cost of Vacancy — and Why Renewals Beat Turnover

Owners tend to underestimate vacancy because they count only the obvious number — the rent they didn't collect. The full cost of a turnover is much larger, and once you see it on paper, keeping a good tenant almost always beats chasing a slightly higher rent from a new one.

What a turnover actually costs

Add these up for a typical San Diego single-family rental turning at, say, $3,000/month:

• Lost rent during vacancy: even a fast 3-week turn is ~$2,100.
• Make-ready: paint, cleaning, carpet, minor repairs — commonly $1,500–$3,000+.
• Marketing + showings: photos, listing, and time.
• Placement / leasing fee: a one-time cost when a new tenant is signed.
• Risk: a new tenant is an unknown; your current one is a known quantity.

It's easy for a single turnover to erase one to two months of rent in total cost. To come out ahead, the new tenant's rent has to clear that hole and keep clearing it before the next turn.

The renewal math

Now compare a renewal. Suppose the market says you could get $150 more per month from a new tenant. Over a 12-month lease that's $1,800 of upside — real money. But if turning the unit to capture it costs you $4,000–$6,000 all-in, you're underwater for years. Renewing your current tenant at, or slightly below, market usually nets more than turning for a higher headline rent.

This is also why our fee model prices a lease renewal at a flat $250 while a new-tenant placement is a percentage of a month's rent: renewals are cheaper for everyone, and the incentives should say so.

Keep good tenants without leaving money on the table

• Start early. Reach out 60–90 days before lease end; a tenant who's already apartment-hunting is expensive to win back.
• Offer a modest, fair increase. Small and predictable beats a big jump that triggers a move — and remember California's AB 1482 caps most annual increases anyway.
• Fix the friction. The fastest way to lose a renewal is slow maintenance. Responsiveness is retention.
• Make renewing easy. A one-click renewal offer with clear terms converts better than a phone-tag negotiation.

Bottom line

Vacancy is the most expensive thing that happens to a rental, and most of that cost is invisible until you total it. Treat a good, paying, low-maintenance tenant as the asset they are — renew them promptly, price the increase fairly, and reserve turnover for when it truly pays.