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What a vacancy really costs: rental vacancy and turnover costs, worked out

A move-out costs more than the cleaning bill. Add up the rent you didn't collect, every turnover expense and any free rent, and you'll know what each turnover really costs and whether a higher rent pays it back.

Updated October 20, 2026 · by Tidy Landlord

The three parts of a turnover's cost

  • Lost rent: every day the unit earns nothing, from the day after the old tenant's paid period ends to the day before the new tenant's rent starts.
  • Turnover costs: cleaning, paint, repairs, advertising, leasing or agent fees, new locks, utilities you carry while it's empty.
  • Concessions: any free rent or move-in special you give the new tenant.

Most landlords remember the second part and forget the first, even though a month of lost rent is often the biggest number on the list.

How to calculate it

  • Days vacant = the days between the move-out date and the move-in date, not counting either one. Out on the 31st and in on the 1st is 0 days.
  • Lost rent = days vacant × the old monthly rent × 12 ÷ 365 (the daily rent).
  • Total cost = lost rent + turnover costs + free rent given.
  • Payback = total cost ÷ the monthly rent increase. It tells you how many months the higher rent takes to earn the turnover back.
  • Vacancy rate = vacant unit-days in the year ÷ (number of units × days in the year).

Use the old rent for lost rent: that's what the unit was earning, and it keeps a rent change from hiding the cost of the empty days.

A worked example

All of these numbers are made up to show the method. A tenant paying $1,800 a month moves out on June 30, and the new tenant moves in on August 1 at $1,900.

  • Days vacant: July 1 to July 31 = 31 days.
  • Lost rent: 31 × $1,800 × 12 ÷ 365 = $1,834.52.
  • Turnover costs: cleaning $250 + paint $600 + repairs $400 + ads $50 = $1,300.
  • Free rent: none.
  • Total cost: $1,834.52 + $1,300 = $3,134.52.
  • Payback: $3,134.52 ÷ $100 more a month = about 31 months.

The $100 raise takes more than two and a half years to earn back the turnover. If the old tenant would have renewed at a smaller increase, keeping them may have paid better. If this landlord owns 4 units and this was the only empty month all year, the vacancy rate is 31 ÷ (4 × 365) = about 2.1%.

Renew or turn over? Compare the year

Say the same tenant would have renewed at $1,850 instead. Over the 12 months from July to June, the renewal brings in 12 × $1,850 = $22,200. The turnover brings in nothing for July, then 11 × $1,900 = $20,900, less $1,300 of turnover costs, or $19,600. In this made-up case the renewal comes out about $2,600 ahead in the first year, and the gap only closes slowly after that. Run the same comparison with your own numbers before you decide how hard to push a renewal increase.

Compare your vacancy rate with the market

Public data shows whether your empty days are normal for the market. In the US, the Census Bureau reported a national rental vacancy rate of 7.3% for the second quarter of 2026 (Census Bureau). In Canada, CMHC publishes vacancy rates and average rents by area (CMHC rental market data). These are broad averages, so compare against your own city and unit type where you can, and track your own rate year over year.

Ways to cut empty days

  • Start before the move-out. Once notice is given, list the unit and book showings. In Ontario, after a notice of termination or an agreement to end the tenancy, a landlord can enter between 8 a.m. and 8 p.m. to show the unit to a potential new tenant without written notice, but must try to tell the tenant first (Landlord and Tenant Board). Other places have their own entry rules, so check yours.
  • Plan the make-ready. Line up cleaners, painters and repairs for the days right after the move-out, and set a target for how many days the work should take.
  • Price it right the first time. An overpriced unit can sit for weeks. Our guide to setting rent with comps shows how to find a market rent.
  • Know which listing sites work. Track inquiries, showings and signed leases by source, then divide ad spend by leases to get the cost per lease.
  • Consider the renewal. Use the payback to compare a raise against the risk of a move-out; the rent increase calculator helps with that.

The tax side

  • US: advertising, cleaning and maintenance, and repairs are common rental expenses. While a rental is vacant and held for rent, you may be able to deduct your ordinary and necessary expenses for it, but you can't deduct the lost rental income itself (IRS Pub. 527).
  • Canada: you can deduct reasonable expenses you incur to earn rental income; current expenses are deducted in the year you incur them, capital expenses over several years as capital cost allowance (CRA Guide T4036). A repaint is usually current; a new kitchen is usually capital.

Lost rent belongs in your own analysis, not on your tax return.

Treat every applicant the same

Pressure to fill a unit fast doesn't change the rules. The Fair Housing Act prohibits discrimination in renting because of race, color, national origin, religion, sex, familial status or disability (HUD), and provinces have human rights codes of their own. Use the same criteria and the same process for every lead.

Frequently asked questions

How do I calculate lost rent from a vacancy?

Multiply the days vacant by the old monthly rent × 12 ÷ 365. A unit renting at $1,800 that sits empty for 31 days loses about $1,835.

What counts as a turnover cost?

Everything you spend to get the unit rented again: cleaning, paint, repairs, advertising, leasing or agent fees, locks and utilities while it's empty, plus any free rent you give the new tenant.

What is a good vacancy rate for a rental?

There's no single number. Compare your own rate with local data, such as CMHC's vacancy rates in Canada or the Census Bureau's rental vacancy rate in the US, and aim to bring yours down year over year.

Can I deduct lost rent on my taxes?

In the US, no: IRS Publication 527 says you can't deduct the loss of rental income while a property is vacant, though some expenses may be deductible. Check with a tax professional for your situation.

Sources

This guide is general information, not legal, financial or tax advice. Every figure in the worked example is made up to show the method. Notice, entry and showing rules differ by province, state and city, and tax rules change, so check the official sources linked above and the rules where your rental is, and ask a lawyer or tax professional if you're unsure.

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