The Real Cost of Vacancy and Turnover (and How to Reduce It)

Most owners watch their monthly expenses closely. The biggest cost in a rental is often one that never shows up as a bill: the months it sits empty, and the work it takes to get it rented again.

Vacancy, in numbers

A month of vacancy costs one-twelfth of a year's rent, or about 8.3% of your annual rental income. For a home renting at $2,000 a month, that's $2,000 of lost rent per empty month, while the mortgage, taxes, insurance and utilities keep running.

Two empty months is a 16.7% hit to the year's income, more than many owners make in profit.

What a turnover really costs

• Lost rent while the home is empty
• Cleaning, paint, repairs and any upgrades between tenants
• Utilities and lawn or snow care the owner carries while vacant
• Marketing, showings and screening for the next tenant
• Leasing fees, if you use a manager

How to reduce vacancy and turnover

• Keep good tenants longer: a renewal is almost always cheaper than a turnover. Fuze does a pre-renewal inspection and market rent analysis, then makes a renewal recommendation. A renewal costs 30% of one month's rent, compared with a full month's rent for placing a new tenant.
• Start the renewal conversation early: talk with good tenants well before the lease ends. Minnesota law (section 504B.144) doesn't let a landlord require a tenant to renew more than six months before a lease of over 10 months expires, but you can always ask.
• Turn units fast: Fuze has an in-house repairs and maintenance team for turnovers, plumbing, electrical, HVAC and full rehabs, so make-ready work isn't waiting on outside contractors' schedules.
• Price it right the first time: an overpriced listing that sits for a month usually costs more than a slightly lower rent that leases right away.
• Respond to maintenance quickly: tenants who get fast repairs are more likely to stay. Fuze handles maintenance intake and coordination 24/7.
• Consider all your options: if you're unsure whether to sell or rent, Fuze can list a property for sale and for rent at the same time, so you go with whichever option works out first.

Incentives matter

Fuze's leasing fee is charged only after a lease is signed, so we don't get paid for placement until your unit is rented. That keeps everyone focused on the same goal: shorter vacancies.

Talk to Fuze about your rental

Want help cutting vacancy on your rentals? See how Fuze property management works, view our pricing, or call 612.353.8080.