In Practice
Renewal rate tells you how many residents choose to stay. Take the leases that came up for renewal, count how many renewed, and divide. A higher rate means fewer turns, less vacancy and lower cost, which is why owners watch it closely.
You will see it on the monthly report, the owner call and the budget, where the renewal assumption drives expected turnover and make-ready cost. Community managers build their renewal plan around the expiring list: early offers, outreach, fixing open service requests and pricing the renewals thoughtfully.
Example: 40 leases expire in a quarter and 26 renew. The renewal rate is 65 percent. If the plan assumed 70 percent, that gap is about two extra move-outs, and each one carries make-ready, downtime and leasing cost.
Common mistake: waiting until the last month to reach out. Residents decide earlier than most teams expect, so start the conversation well ahead of the notice window. Another is quoting a renewal increase with no explanation. A clear, friendly conversation and a resolved work order do more than a gift card. Check your state and local rules on renewal notice and rent increase timing.
How to calculate it
Renewal rate equals leases renewed divided by leases up for renewal, times 100. Example only: 18 renewals out of 30 expiring leases is 60 percent.
Not to Be Confused With
Renewal rate is a number, the share of expiring leases that renewed. Retention is the wider effort of keeping residents happy all year.
Renewal Rate: Common Questions
How do you calculate renewal rate?
Divide the number of residents who renewed by the number of leases that were up for renewal in the period. Decide whether month-to-month renewals count and keep that consistent.
What is a good renewal rate?
It depends on the market and the property type. Compare against your own history and the owner's budget assumption rather than a general number.
