Apartments turnover refers to the period of time when a tenant moves out of an apartment and it becomes vacant. Apartment turnover rates are normally calculated in percentage. The percentage of tenants that move out of the apartment at the end of each contract period.
Apartment turnover rates are important in determining the overall profit margin of a property rental manager or apartment owner. Therefore, it is important to understand how apartment turnover rates affect business and how to minimize the turnover cost.
Here is how to calculate apartment turnover rates
Here’s how to calculate the rate of tenants moving out, which is also known as the apartment turnover rate. Finally, you have to divide the total number of tenants that moved out in a year, by the total number of tenants occupying the apartment in a particular year.
A very high turnover rate signifies a low-profit margin, while a low turnover rate is very good for business.
Causes of High Turnover Rates
Area with High Number of College Students
Apartments located in areas where there are plenty of college students as tenants will experience high turnover rates. This is because of the propensity of the students to move out every year.
High Middle Age Populations
The younger you are the more likely you are to change apartments. Middle-aged individuals bubbling with energy tend to move out of apartments more frequently, thereby increasing the turnover rates.
If a tenant feels redundant and not progressing in a particular job, he tends to move on to other areas to search for greener pastures. This leads to an increase in turnover rates in apartments.
Lack of Job Growths
The following are ways to reduce turnover
Properly Structure your Leases
It is inevitable if you are in the rental business, for tenants not to move out of your apartments. What you have to do is to be ready by properly structuring your leases such that it includes well laid out terms on move outs, cleaning fees, damages, security deposits and other things you feel will cost you more financially. By doing this, the tenants will be aware that he or she has to hand over the property in good condition while leaving.
Develop a Relationship Bond and be Open with Renewals
Tenants tend not to feel like moving out of an apartment if they have a relationship bond with the landlords. It is important to develop trust and belief that you have their interest at heart in any decision you make as a landlord. This makes them feel more at home. Renewals should be kept open and you should have constant conversations with the tenants. You can even introduce discounts on charges for those who keep renewing their tenancy. This definitely will keep them glued to your apartment.
Proper Vetting of Tenants
Proper vetting of tenants with the aid of professionals can help in leasing apartments to tenants who tend to stay longer and also keep the property in good condition. This will help in reducing the cost of maintenance or repairs, thereby lowering the turnover rates.
In conclusion, though, even if you manage to keep your turnover rates at the barest minimum, you will still have some tenants moving out. Always factor in how much your average turnover rate is and the cost of each turnover to you.