Tenant Turnover
Synonyms: Turnover Rate، Tenant Churn، Move-Out Rate، Resident Turnover
Last updated: 2026-09-25
Short Definition
Tenant turnover is the share of tenants who leave a property during a given period (usually a year) relative to the average number of leased units, calculated as move-outs divided by average leased units times 100.
Overview
Legal Basis
Turnover costs are shaped by several legal rules: the documentation fees on the REGA-supervised Ejar platform; Article 14 of the Real Estate Brokerage Law (M/130 dated 30/11/1443H), which sets the leasing brokerage commission at 2.5% of the first year's rent unless otherwise agreed in writing; and the requirement of an advertising licence for every property ad. In Riyadh, the provisions announced on 25 September 2025 fix the rent of previously leased vacant units at the last contract, while allowing the landlord to object, outside existing leases, where the unit underwent substantial structural renovation affecting its rental value or the last lease was concluded before 2024.
Practical Example
A 60-flat compound in Riyadh loses 18 tenants in a year, a turnover rate of 30%. Average rent is SAR 40,000 a year. Each move-out costs: a month and a half of vacancy (SAR 5,000), make-ready SAR 3,000, a 2.5% first-year commission (SAR 1,000) and a SAR 125 documentation fee, totalling SAR 9,125. Annual turnover cost = 18 × 9,125 = SAR 164,250. If better maintenance and communication cut turnover to 15% (9 move-outs), the owner would save SAR 82,125 a year without any rent increase — which is not available in Riyadh during the freeze anyway.
Common Mistakes
- ✗Counting only the commission as turnover cost and ignoring vacancy, make-ready and management time.
- ✗Not asking departing tenants why they are leaving, losing the most useful source for fixing the problem.
- ✗In Riyadh: assuming a change of tenant allows a rent increase, when the rent of a previously leased vacant unit is fixed at the last contract.
- ✗Confusing intentional turnover (replacing a defaulting tenant) with unwanted turnover (a good tenant leaving).
- ✗Leaving non-renewal notices to the last days instead of planning marketing and make-ready early.
International Differences
Turnover is a common property management metric worldwide, usually higher in small apartments and student housing and lower in villas and family units. In markets that allow repricing on a change of tenant, some owners see turnover as a chance to raise rent, whereas rent stabilisation regimes in some European and US cities limit this. Riyadh has stood out since September 2025 because the freeze extends to the vacant unit itself by tying its rent to the last contract registered on Ejar, making turnover almost a pure cost.
