Jaron Witt

The Hidden Costs of Turnover: Why It’s Eating Away at Your NOI

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Turnover is often treated as a routine expense in multifamily operations, but its impact on NOI (Net Operating Income) is anything but ordinary. With the average unit turnover cost exceeding $5,000, the financial implications can quickly eat away at NOI like a late-night craving for turnovers devours your diet plan.

In 2025, focusing on retention and tackling turnover head-on isn’t just a strategy—it’s a necessity.

Let’s “Turnover” the Numbers
Turnover costs are staggering. Let’s break it down for a typical 250-unit property:

  • Rent: $1,253/month
  • Days vacant: 39
  • Unpaid balance at move-out: $415
  • Vacant utility cost: $135
  • Unit turn cost: $2,075
  • CAC (marketing, concessions, screening, etc.): $856

Total per unit: $5,109

For a property with a 50% turnover rate (116 units/year), this translates to an annual turnover cost of $592,644.

The takeaway? Turnover is one of the most significant threats to profitability, but it’s also an area where small changes can yield big results.

Why Turnover is So Expensive
Turnover isn’t just about the time and money spent getting a unit ready for a new resident. It impacts every layer of your NOI:

  1. Vacant Days
    Every day a unit sits empty is lost revenue. With an average vacancy period of 39 days, properties are bleeding cash while waiting for new leases.
  2. Marketing Costs
    Filling empty units requires marketing dollars, leasing staff time, and often concessions to entice renters.
  3. Operational Strain
    Maintenance teams are stretched thin with unit turns, delaying responsiveness to existing residents—a vicious cycle that can drive further turnover.

Small Adjustments, Big Gains
The good news? You don’t have to overhaul your operations to make an impact. Incremental improvements can significantly boost NOI.

  • Reduce Turnover Rates:
    Cutting turnover from 50% to 45% could add $61,308 in NOI annually.
  • Shorten Vacant Days:
    Reducing vacancy periods from 39 days to 35 days could generate $16,790 in additional NOI.
  • Lower Unpaid Balances:
    A 25% reduction in unpaid balances adds $10,400 to NOI.
  • Streamline Unit Turn Costs:
    Trimming unit turn costs by 20% results in an extra $48,140 in NOI.

These seemingly small changes can snowball into significant financial gains.

The Role of Resident Retention
At its core, reducing turnover comes down to retention. Properties that prioritize resident satisfaction are reaping the rewards:

  • Faster maintenance response times build trust and loyalty.
  • Thoughtful amenities, like well-designed closet systems, enhance daily living.
  • Transparent communication ensures residents feel valued and heard.

Retention isn’t just about keeping residents happy—it’s about keeping your NOI intact.

The Final Turn
As you plan for 2025, ask yourself:

  • How can you make retention a priority?
  • Where can you tighten up your turnover processes?

Turnover isn’t just a cost of doing business—it’s an opportunity to do better. By focusing on the metrics that matter, you can protect your NOI, improve resident satisfaction, and position your property for long-term success.

Want to learn more about how thoughtful upgrades, like Spatia Designs’ closet systems, can help you reduce turnover? DM us on LinkedIn & check out our Gallery to see our LOGIC and LUXE closet systems!

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