Property Management
What is 'turnover cost' in property management and why is it significant?
AThe cost of the management company switching clients
BThe total cost incurred when a tenant vacates and a new tenant moves in, including lost rent, cleaning, repairs, and leasing costs✓ Correct
CThe cost of converting a property from residential to commercial
DThe depreciation cost of property improvements
Explanation
Turnover cost includes: lost rent during vacancy, cleaning and repairs beyond normal wear, painting, carpet replacement, leasing fees, and marketing costs. Minimizing turnover (through tenant satisfaction and fair treatment) directly improves net operating income. High turnover is one of the biggest expenses in property management.
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