Vacancy rate is the number every landlord watches, because it is trivially easy to calculate and it appears on every report. Turnover cost is the number that actually determines returns, and most small portfolios have never calculated it once.
The gap between them is substantial. Vacancy captures the rent you did not collect. It captures none of the work, none of the materials, and none of the risk that accompanies replacing a household.
Building the Real Number
Work through a single recent turnover and add it up honestly.
Lost rent
The obvious component. Count from the day the outgoing tenant’s obligation ends to the day the incoming tenant’s begins. In most Atlantic Canadian markets, outside of the summer peak, two to six weeks is realistic. Winter turnovers in smaller communities run longer.
Preparation costs
Cleaning is near universal, and a proper turnover clean is not a light one. Paint, at minimum touch-ups and frequently full rooms every second or third tenancy. Flooring repair or replacement at longer intervals. Repairs that were deferred while the unit was occupied, which is most of them, because it is far easier to replace a vanity in an empty unit. Appliance servicing or replacement. Lock changes or rekeying, which should be every tenancy.
Marketing and leasing
Photography if done properly. Listing fees on paid platforms. Your time writing and managing listings, answering inquiries — of which a large share go nowhere — conducting showings, screening applicants, verifying references and employment, preparing the lease, and running the move-in inspection.
Count those hours. For a single unit, ten to twenty hours is typical, and many landlords value their own time at zero here, which is the main reason the total looks smaller than it is.
Utilities and carrying costs during vacancy
Heat cannot be turned off in a Maritime winter. Power stays on for showings and work. Insurance may be affected by vacancy provisions, and some policies restrict coverage after a defined vacant period — worth checking your own wording rather than assuming.
Risk
Harder to price but real. Every new tenancy carries some probability of arrears, damage or an early departure. Even excellent screening does not reduce that to zero. A known, reliable tenant has a risk profile that a stranger with good references does not.
What the Total Usually Looks Like
Worked through properly, turnover on a typical unit tends to land between one and a half and three months of rent, with older properties and slower markets at the upper end. For a unit renting at fourteen hundred dollars, that is roughly two thousand to four thousand two hundred dollars, of which perhaps half is the vacancy everyone tracks.
The other half sits scattered across cleaning invoices, hardware store receipts, and hours nobody recorded.
What This Changes
Retention spending becomes obviously rational
If turnover costs two and a half months of rent, then spending the equivalent of half a month to keep a good tenant is straightforwardly profitable. That reframes decisions that otherwise feel like giving something away: a moderate rather than maximum rent increase, replacing a tired but functional appliance on request, approving a pet with appropriate terms, doing the repair promptly rather than at the cheapest moment.
None of these are generosity. They are the cheaper branch of a comparison most landlords never run.
Long tenancies get valued correctly
A tenant who stays six years avoids perhaps three turnovers. Against a unit turning over every two years, that is six to nine months of rent retained, before counting the reduced risk and reduced management attention. A long-tenured tenant paying somewhat below market is frequently outperforming a market-rate unit that churns.
Turnover speed becomes worth investing in
Since much of the cost is time-based, compressing the timeline pays directly. Start marketing as soon as notice is received rather than when the unit is empty. Book cleaners and painters in advance of the move-out date instead of after. Have the maintenance list ready from the move-out inspection so vendors arrive with a scope. Overlap tasks rather than sequencing them.
Cutting three weeks to ten days on a fourteen hundred dollar unit saves roughly five hundred dollars in rent alone, repeatably, for no capital outlay.
Screening effort is justified
Thorough screening feels slow when there is a vacant unit generating no income and an applicant standing in front of you. But a tenancy that fails at month eight costs a full additional turnover plus whatever damage and arrears accompany it. Two extra days of verification against a two-to-three month cost is a favourable trade every time.
Where Not to Take This
Two cautions, because the conclusion can be over-applied.
Retaining a bad tenant is not a saving. A tenant generating chronic arrears, damage or complaints from neighbours costs more than turnover, and the cost compounds. The arithmetic here favours retaining good tenants, not all tenants.
And holding rent frozen indefinitely to avoid turnover eventually produces a unit so far below market that the eventual correction is severe, or a property that stops covering its costs. The point is to size increases with the turnover cost in view, not to abandon increases.
Start Measuring It
The reason this is not managed is that it is not measured. Create a simple record for each turnover: dates vacant, every invoice, and your hours. After three or four turnovers you will have a defensible per-unit figure for your own portfolio, which is worth far more than any industry average.
Then use it. Put it in front of owners when recommending retention spending, and put it in front of yourself the next time a good tenant asks for something modest.