{
  "slug": "lease-renewal-vs-turnover-cost",
  "title": "Lease Renewal vs Turnover Cost Calculator",
  "heading": "Lease Renewal vs Turnover Cost Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/lease-renewal-vs-turnover-cost",
  "summary": "Compare a renewal incentive's cost against letting a tenant leave and re-leasing the unit.",
  "description": "When a lease is about to expire, landlords often default to raising rent to full market without considering whether the incremental rent gain is worth the risk of the tenant leaving. This calculator directly compares the cost of a renewal incentive — a small rent discount, a gift card, a minor upgrade — against the full turnover cost you'd pay if the tenant leaves instead, so you can see the exact rent increase threshold above which offering a renewal incentive becomes the cheaper path even though it feels like giving up money.",
  "formula": "Turnover cost = vacancy + make-ready + marketing + leasing fee. Renewal cost = incentive value + (foregone rent increase × 12). Compare the two directly.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=lease-renewal-vs-turnover-cost",
  "inputs": [
    {
      "id": "currentRent",
      "label": "Current monthly rent",
      "kind": "number",
      "hint": null,
      "default": 1750,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "marketRent",
      "label": "Market rent for this unit",
      "kind": "number",
      "hint": null,
      "default": 1950,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "renewalIncrease",
      "label": "Rent increase you'd offer at renewal",
      "kind": "number",
      "hint": null,
      "default": 75,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "incentiveValue",
      "label": "Renewal incentive cost (gift card, discount month)",
      "kind": "number",
      "hint": null,
      "default": 200,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "turnoverCost",
      "label": "Estimated full turnover cost if they leave",
      "kind": "number",
      "hint": null,
      "default": 2900,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "savings",
      "label": "Savings from renewing vs turnover",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "renewalCost",
      "label": "Total cost of offering the renewal",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "turnoverCost",
      "label": "Estimated turnover cost if they leave",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "foregoneAnnual",
      "label": "Annual rent foregone vs full market",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "renewalRent",
      "label": "Proposed renewal rent",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Current monthly rent: 1750 $",
      "Market rent for this unit: 1950 $",
      "Rent increase you'd offer at renewal: 75 $",
      "Renewal incentive cost (gift card, discount month): 200 $",
      "Estimated full turnover cost if they leave: 2900 $"
    ],
    "outputs": [
      "Savings from renewing vs turnover: $1,200",
      "Total cost of offering the renewal: $1,700",
      "Estimated turnover cost if they leave: $2,900",
      "Annual rent foregone vs full market: $1,500",
      "Proposed renewal rent: $1,825"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter current monthly rent ($).",
      "Enter market rent for this unit ($).",
      "Enter rent increase you'd offer at renewal ($).",
      "Enter renewal incentive cost (gift card, discount month) ($).",
      "Enter estimated full turnover cost if they leave ($).",
      "Read your savings from renewing vs turnover 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": 1050,
        "marketRent": 1175,
        "renewalIncrease": 45,
        "incentiveValue": 125,
        "turnoverCost": 1700
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "currentRent": 1750,
        "marketRent": 1950,
        "renewalIncrease": 75,
        "incentiveValue": 200,
        "turnoverCost": 2900
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "currentRent": 2800,
        "marketRent": 3125,
        "renewalIncrease": 120,
        "incentiveValue": 325,
        "turnoverCost": 4600
      }
    }
  ],
  "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 much rent increase is too aggressive at renewal?",
      "a": "There's no universal number, but increases above 8-10% meaningfully raise the odds a good tenant starts looking elsewhere, especially if local market rent hasn't moved that much. Match the increase to actual comps and consider phasing in a bigger gap over two renewal cycles rather than one large jump."
    },
    {
      "q": "Is a renewal incentive really cheaper than raising rent to market?",
      "a": "Often yes, once you price in full turnover cost. A $200 gift card or one discounted month is usually far cheaper than a month of vacancy, make-ready, and a leasing fee, so unless the tenant is a poor fit (chronic late payer, high complaint volume), retention math tends to favor a modest incentive."
    },
    {
      "q": "When should I let a tenant go instead of retaining them?",
      "a": "When they're consistently late, cause excessive maintenance calls, generate neighbor complaints, or are meaningfully below market with a large gap that a single renewal cycle can't close reasonably. In those cases, turnover cost is worth paying to reset the unit with a better tenant or a market-rate lease."
    },
    {
      "q": "Does this analysis change for good long-term tenants?",
      "a": "Yes — a tenant who's stayed several years and pays reliably is worth more than the math on a single renewal cycle suggests, since they've already proven low risk and their historical below-market gap has likely been recovered through years of avoided turnover costs. Weight retention more heavily for proven long-term tenants."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/tenant-turnover-cost",
    "https://www.revenuelab.fyi/toolbox/lease-renewal-increase-tradeoff"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Lease Renewal vs Turnover Cost Calculator (https://www.revenuelab.fyi/toolbox/lease-renewal-vs-turnover-cost)"
}