{
  "slug": "lease-renewal-increase-tradeoff",
  "title": "Lease Renewal Rent Increase Tradeoff Calculator",
  "heading": "Lease Renewal Increase Tradeoff Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/lease-renewal-increase-tradeoff",
  "summary": "Find the rent increase that maximizes expected value once move-out risk is factored in.",
  "description": "Every dollar of renewal increase raises revenue if the tenant stays, but it also raises the probability they leave, and once they leave you eat a full turnover cost. This calculator models expected value across a few increase options using an estimated probability of the tenant staying at each increase level, so instead of picking a number by gut feel you can see which increase size maximizes expected annual value once the move-out risk and turnover cost are priced in — this is the same logic pricing teams use for demand elasticity, applied to a single renewal decision.",
  "formula": "Expected value = (probability of staying × (current rent + increase) × 12) − ((1 − probability of staying) × turnover cost) − ((1 − probability of staying) × foregone rent during vacancy).",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=lease-renewal-increase-tradeoff",
  "inputs": [
    {
      "id": "currentRent",
      "label": "Current monthly rent",
      "kind": "number",
      "hint": null,
      "default": 1700,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "increaseOption",
      "label": "Proposed rent increase",
      "kind": "number",
      "hint": null,
      "default": 100,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "stayProbabilityPct",
      "label": "Estimated probability tenant stays at this increase",
      "kind": "number",
      "hint": null,
      "default": 70,
      "unit": "%",
      "min": 0,
      "max": 100
    },
    {
      "id": "turnoverCost",
      "label": "Turnover cost if they leave",
      "kind": "number",
      "hint": null,
      "default": 2800,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "vacancyMonths",
      "label": "Expected vacancy if they leave",
      "kind": "number",
      "hint": null,
      "default": 0.75,
      "unit": "months",
      "min": 0,
      "max": 6
    }
  ],
  "outputs": [
    {
      "id": "expectedValue",
      "label": "Expected annual value of this increase",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "gainVsNoIncrease",
      "label": "Expected gain vs no increase",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "annualIfStays",
      "label": "Annual rent if tenant stays",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "costIfLeaves",
      "label": "Total cost if tenant leaves",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "newRent",
      "label": "Proposed new monthly rent",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Current monthly rent: 1700 $",
      "Proposed rent increase: 100 $",
      "Estimated probability tenant stays at this increase: 70 %",
      "Turnover cost if they leave: 2800 $",
      "Expected vacancy if they leave: 0.75 months"
    ],
    "outputs": [
      "Expected annual value of this increase: $13,875",
      "Expected gain vs no increase: -$6,525",
      "Annual rent if tenant stays: $21,600",
      "Total cost if tenant leaves: $4,150",
      "Proposed new monthly rent: $1,800"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter current monthly rent ($).",
      "Enter proposed rent increase ($).",
      "Enter estimated probability tenant stays at this increase (%).",
      "Enter turnover cost if they leave ($).",
      "Enter expected vacancy if they leave (months).",
      "Read your expected annual value of this increase on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "currentRent": 1025,
        "increaseOption": 60,
        "stayProbabilityPct": 40,
        "turnoverCost": 1700,
        "vacancyMonths": 0.44999999999999996
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "currentRent": 1700,
        "increaseOption": 100,
        "stayProbabilityPct": 70,
        "turnoverCost": 2800,
        "vacancyMonths": 0.75
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "currentRent": 2725,
        "increaseOption": 160,
        "stayProbabilityPct": 100,
        "turnoverCost": 4500,
        "vacancyMonths": 1.2000000000000002
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How do I estimate the probability a tenant stays?",
      "a": "There's no perfect formula, but a reasonable starting point: a small increase in line with local rent growth (2-4%) often keeps stay probability above 85-90% for a satisfied tenant, while a large jump toward full market catch-up can drop it to 50-60% or lower depending on how far below market they currently sit and how tight the local rental market is."
    },
    {
      "q": "Should I run this for multiple increase amounts?",
      "a": "Yes — that's the point of the model. Run $50, $100, $150, and $200 increase scenarios with your best-guess stay probability for each, and you'll typically find expected value peaks somewhere in the middle rather than at the largest increase, because the turnover risk grows faster than the extra rent as increases get larger."
    },
    {
      "q": "Does this replace judgment about a specific tenant?",
      "a": "No — this is a portfolio-level expected-value framework, useful when you're setting a renewal policy across many units. For an individual excellent long-term tenant, the relationship and reliability value often outweighs a purely mathematical expected-value calculation, so use judgment alongside the model, not instead of it."
    },
    {
      "q": "What if the tenant is already well below market?",
      "a": "The model will generally favor a larger increase in that case, since even a meaningfully higher stay-risk still nets more expected value when the rent gap is large — but temper large jumps with local tenant protection laws, since many cities and a few states cap allowable annual increase percentages regardless of market gap."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/lease-renewal-vs-turnover-cost",
    "https://www.revenuelab.fyi/toolbox/landlord-rent-increase"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Lease Renewal Rent Increase Tradeoff Calculator (https://www.revenuelab.fyi/toolbox/lease-renewal-increase-tradeoff)"
}