Renewal vs turnover calculator
Is a smaller renewal increase better for the owner than pushing to market rent and risking a move-out? Compare both in year one.
An owner may push for market rent at renewal. Sometimes that is right. A smaller increase that keeps a good tenant can beat a full-market increase that triggers a move-out, once vacancy and make-ready are counted. Run both sides before the renewal conversation.
How the math works
- Turnover cost = daily rent x expected vacant days + make-ready + leasing fee and marketing.
- Renewal rent = current rent x (1 + renewal increase).
- Market rent = current rent x (1 + market gap).
- Extra rent from market over 12 months = (market rent minus renewal rent) x 12.
- If the turnover cost is larger than the extra rent, renewing at the smaller increase is better for the owner in year one.
How to use the result
Bring this to the owner with your renewal recommendation 100 days before the lease ends. Check your state page first: some states and cities cap increases or require longer notice, which changes both options.
Questions
- Does this account for rent caps?
- No. If your state or city caps increases, use the capped figure as the market option. See the rent control comparison for statewide rules.
- What about the second year?
- The calculator looks at year one only. A new tenant at market rent keeps the higher base in later years, so for long holds rerun it with your expected increases.
- How many vacant days should I assume?
- Use your own average days from move-out to new lease start for similar units in the last year.
Want someone to look at your numbers with you?
Bring these results to a 20-minute call with Julian and leave with the two or three levers that move your margin most.
With Julian Calvo, who works with property management companies at LeadSimple.
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