The Hidden Math: Why Turnover Cost Isn't Just Repairs
Most NH multifamily operators underestimate turnover costs because they focus only on the repair bill. The real cost includes four buckets: lost rent during vacancy, make-ready work, marketing and leasing expenses, and administrative time. In my experience managing properties from Nashua to Portsmouth, vacancy loss typically represents 40-60% of total turnover cost.
Here's the breakdown that catches operators off guard. A 1BR unit renting for $1,400 per month costs roughly $47 per day in lost rent. If your average vacancy runs 15 days (common in NH's seasonal market), you're looking at $705 in lost revenue before you spend a dollar on cleaning or repairs.
The make-ready work adds another layer. Paint, cleaning, minor repairs, and unit prep typically run $1,200-2,800 for a standard unit. Marketing costs include listing fees, showing time, and application processing. Administrative overhead covers move-out inspections, vendor coordination, and lease preparation. When you add these buckets together, total turnover costs often hit $3,000-5,500 per unit.
Studio and 1BR Turnover: Lower Materials, Same Vacancy Risk
Studios and 1BR units offer the lowest absolute make-ready costs but don't automatically mean cheaper turnovers. The math works differently because vacancy duration affects smaller units just as much as larger ones.
A studio apartment in Manchester might need $800-1,500 in make-ready work compared to $2,000+ for a 3BR. Less square footage means less paint, fewer fixtures to replace, and simpler cleaning. But if that studio rents for $1,100 per month and sits vacant for three weeks, you've lost $770 in rent alone.
The challenge with smaller units is market positioning. Studios and 1BRs often compete in the most price-sensitive segment, where tenants shop multiple options before deciding. This can extend vacancy periods even when the unit is move-in ready. I've seen well-maintained studios sit empty for 20+ days simply because renters had more choices in that price range.
One advantage: smaller units typically attract single professionals who move with less disruption. You're less likely to deal with carpet replacement from pet damage or wall repairs from furniture moves. The trade-off is that these tenants also move more frequently for job changes or lifestyle shifts.
2BR Units: Where Make-Ready Costs Start Climbing
Two-bedroom units hit the sweet spot where turnover costs become more predictable but also more expensive. These units typically require $1,800-3,200 in make-ready work, with the higher end reflecting properties that haven't been updated recently.
The cost drivers multiply with square footage. More rooms mean more paint, additional flooring wear, extra fixtures, and often appliance issues. A 2BR unit might need refrigerator repairs, dishwasher replacement, or HVAC work that doesn't apply to smaller spaces. Bathroom and kitchen updates also cost more when you're dealing with larger layouts.
Vacancy timing becomes crucial for 2BR units because they often rent to small families or couples who plan moves around work schedules or school years. In NH markets like Concord or Dover, I've noticed 2BR turnovers taking 10-25 days depending on season. Summer moves happen faster; winter turnovers can stretch longer as fewer families relocate during school months.
The revenue impact scales with rent levels. A 2BR renting for $1,800 per month costs $60 per day in lost income. Combined with higher make-ready expenses, total turnover costs often reach $4,000-6,000 for these units. The key is managing vacancy duration through strategic timing and competitive pricing.
3BR+ Turnover: Highest Absolute Cost, Longer Vacancy Windows
Three-bedroom and larger units generate the highest absolute turnover costs but often the best long-term tenant stability. These properties typically require $2,500-4,500 in make-ready work, with family wear patterns creating different maintenance needs.
Larger units see more intensive use. Kids' rooms need frequent repainting, common areas show traffic wear, and families tend to personalize spaces with wall hangings or modifications. I've handled 3BR turnovers requiring carpet replacement, kitchen cabinet repairs, and bathroom fixture updates that rarely come up in smaller units.
The vacancy challenge intensifies with family-sized units. Parents coordinate moves around school schedules, job transfers, and housing availability. This planning cycle can extend vacancy periods to 20-35 days, especially during off-peak seasons. A 3BR renting for $2,400 per month loses $80 daily, making vacancy management critical.
However, families who find the right fit often stay longer. While turnover costs are higher upfront, successful 3BR placements can generate 18-36 months of stable occupancy. The economics work when you amortize turnover costs across longer tenancy periods.
For NC multifamily operators, this pattern holds across different markets, though specific cost ranges vary by region.
NH Market Reality: Seasonal Patterns That Amplify Costs
NH's rental market follows predictable seasonal patterns that directly impact turnover costs. Summer months (May through August) see faster re-leasing but higher competition among landlords. Winter turnovers often take longer but face less market competition.
College towns like Durham or Keene create additional complexity. Student housing follows academic calendars, creating concentrated turnover periods that can overwhelm local contractors and extend make-ready timelines. Non-student properties benefit from reduced competition during these peak periods but may struggle with contractor availability.
Weather affects both turnover timing and costs. Winter moves require heated units during showings, snow removal for access, and sometimes delayed maintenance work. I've seen February turnovers cost 15-25% more than summer equivalents due to heating expenses and weather-related delays.
The seasonal pattern also affects tenant quality and lease terms. Families moving during school breaks often sign longer leases and show more stability. Off-season renters might accept shorter terms or month-to-month arrangements that increase future turnover frequency.
Understanding these patterns helps with exit timing decisions and operational planning. Properties with high winter vacancy rates might benefit from strategic renovations during slow periods or adjusted lease expiration schedules.
Smart operators budget turnover costs at 8-12% of gross rental income annually, with higher percentages for properties experiencing management transitions or deferred maintenance. The key is tracking actual costs by unit type and adjusting underwriting models accordingly.
When evaluating properties for sale, buyers increasingly focus on operational realities including turnover histories and make-ready costs. Properties with documented low-turnover operations command premium pricing because buyers can model more predictable cash flows.
The bottom line: turnover costs vary significantly by unit type, but vacancy duration often drives total expense more than make-ready scope. Successful operators focus on minimizing vacancy periods through competitive pricing, efficient processes, and strategic lease timing rather than just controlling repair costs.