Lease Renewal vs Turnover Calculator
Compare the net revenue from renewing a current tenant with the net revenue from turning the unit and signing a replacement. The calculator also solves the replacement rent and vacancy threshold needed to break even.
Better optionRenew the tenant
- Renewal net revenue
- $21,350.00
- Replacement net revenue
- $18,380.90
- Net advantage
- $2,969.10
- All-in turnover drag
- $5,619.10
- Break-even replacement rent
- $2,282.38
- Required rent premium
- 26.8%
- Maximum break-even vacancy
- Replacement trails at zero vacancy
Turnover drag breakdown
| Item | Amount |
|---|---|
| Vacancy rent not collected | $1,971.25 |
| Concession value within period | $0.00 |
| Leasing fee | $1,000.00 |
| Make-ready and marketing costs | $2,500.00 |
| Extra vacancy carrying cost | $147.84 |
Vacancy is converted to months using 30.4375 days per month.
Concessions are capped at the occupied months inside the comparison period.
The vacancy break-even assumes the entered concession fits inside the occupied period.
How to use this calculator
- Enter the proposed renewal rent and the rent a replacement tenant is likely to sign.
- Choose the comparison period that starts when the renewal term would begin.
- Add the expected vacancy, make-ready costs, leasing fee, and any free-rent concession.
- Include any renewal credit or owner-paid improvement offered to keep the current tenant.
- Compare the net revenue, turnover drag, and break-even thresholds before choosing a path.
How the renewal comparison is calculated
This calculator compares both choices over the same number of months. Renewal revenue is simple: the renewal rent is collected for the full comparison period, then any renewal incentive or retention cost is subtracted.
renewal net revenue = renewal rent × months − renewal incentive
Replacement revenue starts later because the unit is vacant during make-ready and marketing. Vacancy days are converted to months using 30.4375 days per month. The replacement tenant only pays during occupied months, and free-rent concessions are capped at the occupied months that fall inside the comparison period.
replacement net revenue = replacement rent × (occupied months − concession months) − leasing fee − fixed turnover costs − vacancy carrying cost
The leasing fee is treated as a percentage of one month of replacement rent. If the vacancy equals or exceeds the whole comparison period, the calculator assumes no replacement rent is collected and no leasing fee or concession is charged.
What moves the answer most
The result is usually driven by three numbers: the rent premium a new tenant will actually sign, the length of vacancy, and the one-time turnover cost. A higher advertised rent does not help unless it becomes signed rent soon enough to overcome lost rent, make-ready work, leasing fees, and concessions. A small renewal increase can beat a larger replacement rent when the unit sits empty for a month or more.
The all-in turnover drag line shows the cost of choosing turnover before the replacement rent premium has a chance to recover it. It includes rent lost to vacancy, concession value, the leasing fee, fixed turnover costs, and extra carrying costs while vacant.
Break-even rent and vacancy
The break-even replacement rent is the monthly rent a new tenant must pay for turnover to equal renewal over the selected period:
break-even rent = (renewal net revenue + fixed turnover costs + vacancy carrying cost) ÷ (occupied months − concession months − leasing fee rate)
If that denominator is zero or negative, no finite replacement rent breaks even inside the selected period. The required rent premium compares the break-even rent with the renewal rent and is hidden when the renewal rent is zero.
The maximum break-even vacancy solves the other side of the decision: how many vacant days the entered replacement rent can tolerate before it ties renewal. If the result is negative, replacement already trails even with zero vacancy. If it exceeds the comparison period, replacement remains ahead throughout the modeled period.
What this leaves out
The calculator is a planning model, not a lease-up forecast. It does not value tenant reliability, payment history, unusual damage risk, management time, rent-control limits, notice rules, fair-housing obligations, taxes, financing, depreciation, appreciation, or the time value of money.
Worked example
Suppose a tenant would renew at $1,800 per month for 12 months, with a $250 renewal incentive. A replacement tenant is expected to sign at $2,000 per month after 30 vacant days. Turnover also includes $2,500 of make-ready and marketing costs, $150 per vacant month of extra carrying cost, a leasing fee equal to 50% of one month's replacement rent, and no free-rent concession.
The renewal path produces $21,350 of net revenue. The replacement path has about 11.01 occupied months, collects about $22,029 of rent, then subtracts a $1,000 leasing fee, $2,500 of fixed costs, and about $148 of vacancy carrying cost. Replacement net revenue is about $18,381, so renewal is ahead by about $2,969.
With those same inputs, the all-in turnover drag is about $5,619. A replacement tenant would need to pay about $2,282 per month to break even, a required premium of about 26.8% over the renewal rent. The entered $2,000 replacement rent trails renewal even with zero vacancy, so there is no positive vacancy cushion.
Common questions
How much does one month of rental vacancy really cost?
One month of vacancy costs the rent that would have been collected during that month, plus any owner-paid utilities, lawn care, security, or other carrying costs that occur only while the unit is vacant. This calculator uses 30.4375 days per month so a 30-day vacancy is slightly less than one average month.
When is raising rent enough to justify tenant turnover?
A higher rent justifies turnover when the extra rent collected during the comparison period is larger than vacancy loss, concessions, leasing fees, make-ready work, and vacancy carrying costs. The break-even replacement rent shows the signed monthly rent needed for that to happen.
What expenses should be included in turnover costs?
Include costs caused by the tenant change, such as cleaning, paint, repairs, lock changes, advertising, screening, and make-ready labor. Do not include ordinary ownership costs that would exist under both renewal and replacement unless they are higher only while the unit is vacant.
How should free-rent concessions be entered?
Convert the concession to months of rent. Two weeks free is about 0.5 months, and one month free is 1 month. The calculator caps the concession at the occupied months inside the comparison period.
Should a property manager's leasing fee count as turnover cost?
Yes, if the fee is paid only when a new tenant is placed. Enter it as a percentage of one month of the replacement rent, such as 50 for half a month or 100 for one full month.
Is keeping a below-market tenant more profitable than replacing them?
It can be, especially over a short comparison period or when turnover costs are high. A below-market renewal may still win if the rent premium from a replacement tenant is not large enough to recover vacancy, concessions, leasing fees, and make-ready costs.