What is meant by "turnover ratio" in property management?

The term "turnover ratio" in property management specifically refers to the percentage of units that become vacant over a particular period, typically a year. This metric is crucial for property managers as it helps assess the leasing performance of a property. A high turnover ratio indicates that many units are frequently vacated, which can lead to increased costs related to preparing units for new tenants, marketing to attract new renters, and potential lost revenue during vacancy periods.

Understanding the turnover ratio allows property management to develop strategies aimed at improving tenant retention and optimizing occupancy rates. Monitoring this ratio is essential for financial planning and can influence decisions regarding rental pricing, tenant screening processes, and property upgrades.

The other options do not adequately capture the concept of turnover ratio. While knowing the total number of tenants provides context, it does not indicate how many are leaving. The rate of rent increases relates to pricing strategies rather than vacancy rates, and the time it takes to lease a unit provides insight into leasing efficiency, but again, it does not directly reflect the percentage of units that become vacant. Thus, focusing on the turnover ratio as the percentage of vacant units offers the most pertinent information regarding property management performance.