Compare the cost of renewing a tenant's lease at a discount versus turning the unit over. Factor in vacancy, repairs, and leasing fees.
One of the most important financial decisions landlords face is whether to renew an existing tenant (potentially at a discounted rate) or let them go and find a new tenant at market rent. The math often favors renewal because turnover is surprisingly expensive: vacancy loss, cleaning and repairs, marketing, leasing agent fees, and the risk of extended vacancy.
A typical unit turnover costs $2,000–$8,000+ including 1–2 months of lost rent. If you're considering raising rent by $100/month (gaining $1,200/year) but risk losing the tenant, a single month of vacancy ($1,500) wipes out more than a year's worth of the increase.
This calculator compares the net income from renewing at a given rate versus the expected net income from turning the unit and leasing to a new tenant at market rent, accounting for all turnover costs.
Homebuyers, investors, and real-estate professionals all benefit from precise lease renewal vs. turnover cost figures when evaluating properties, negotiating deals, or planning long-term investment strategies. Save this calculator and revisit it whenever market conditions or your financial situation changes.
Landlords overestimate the upside of turnover and underestimate its costs. This calculator provides a clear comparison showing that moderate rent increases with retention almost always beat turnover. Instant recalculation lets you compare scenarios side by side, so every buying, selling, or investment decision is grounded in solid financial analysis. No sign-up is required, and you can instantly re-run scenarios as interest rates, property values, or your financial goals evolve. No sign-up is required, and you can instantly re-run scenarios as interest rates, property values, or your financial goals evolve.
Renewal Income = Renewal Rent × Lease Months Turnover Income = (Market Rent × (Lease Months − Vacancy Months)) − Turnover Costs Net Advantage = Renewal Income − Turnover Income
Result: Renewal nets $18,600 vs. Turnover nets $13,825 — renewal wins by $4,775
Renewing at $1,550 for 12 months = $18,600. New tenant at $1,650 for 10.5 months (after 1.5 months vacancy) minus $3,500 turnover costs = $13,825. Renewal earns $4,775 more despite the $100/month lower rent.
On a $1,500/month unit, one month of vacancy costs $1,500. Add $2,000 in turnover costs and the total is $3,500. To justify that loss, a new tenant must pay $292/month more ($3,500 / 12 months) than the renewed tenant's rent. Most landlords can't get that large a premium.
Good tenants maintain the property, report issues early (preventing major damage), and require less management time. These benefits don't show up in the math but reduce your long-term costs and stress.
Turnover is justified when: the tenant is significantly below market (15%+), you need to renovate the unit to upgrade it to a higher rent tier, the tenant has a history of problems, or the market is so hot that vacancy is near zero and you'll fill immediately.
Total turnover cost typically ranges from $2,000 to $8,000+. This includes: vacancy loss (1–2 months), painting and cleaning ($500–$1,500), minor repairs ($200–$1,000), marketing ($100–$500), and leasing agent fees (50–100% of one month's rent). Higher-end units cost more to turn.
Not always. If the current tenant is significantly below market (10%+), the unit needs substantial updating, or the tenant is problematic, turnover may be justified. But for good tenants within 5–7% of market, renewal almost always wins financially.
Aim for 2–5%, ideally bringing the tenant closer to market without exceeding it. Increases above 7–10% trigger tenant shopping behavior. If you need a larger increase, consider phasing it over 2 renewals.
Proactively offering a modest rent decrease (5%) builds loyalty and prevents the tenant from realizing they're overpaying. Losing a tenant in a soft market means even longer vacancy, amplifying turnover costs.
Absolutely. Leasing agents typically charge 50–100% of one month's rent for placing a new tenant. On a $1,800/month unit, that's $900–$1,800 — a significant cost that doesn't exist with renewal.
Start the renewal conversation 60–90 days before lease expiration. This gives both parties time to negotiate and gives you time to list the unit if the tenant declines. Waiting too long risks unexpected vacancy.