Vacancy Rate Calculator

• Use a window, not an instant. Today’s occupancy is only a snapshot; a measured period captures turnover. Unit-months let a duplex and a forty-unit block be compared on one scale.
• Take renovations out entirely. Off-market days belong in neither the numerator nor the denominator, or the rate drifts down and starts lying to you.
• Track credit loss separately. A nonpaying occupied unit is not physically vacant, so do not add it to empty days or unit-months. This site combines vacancy and credit loss only in its underwriting allowance because both reduce collected income before expenses are counted.
• Reconcile against the ledger. Whatever rate you measure, feed it back through your underwriting above. If the deal only works at 3%, the evidence behind that assumption deserves close scrutiny.

How do you calculate vacancy rate?

Two ways that give the same number when they cover the same units and period. By time: vacant days divided by available days — 18.25 empty days out of 365 is 5%. By capacity: vacant unit-months divided by available unit-months — a unit that sits empty for one month of its year is 1 ÷ 12, an 8.33% rate. Both are shown above, computed live.

What is a good vacancy rate?

One your own lease-up history supports, not a national benchmark. The useful test is local: how long did your recent turns actually take, and how long do comparable units in the submarket sit empty before leasing? On the worked example here, every point of vacancy is worth $327 of potential income and roughly $301 of net operating income, so the allowance you pick moves the whole analysis.

What is the difference between vacancy rate and occupancy rate?

Only direction. Occupancy is the complement of vacancy — 95% occupancy and 5% vacancy are two descriptions of the same measured capacity. This model uses the vacancy side because it applies an allowance against potential income.

Does vacancy include the gap between tenants?

Yes. Turnover time is the emptiest, most predictable part of the year, so those days belong in the numerator whether the unit was listed or being repainted. What belongs out is genuinely off-market time: a renovation that takes the unit out of service removes those days from both sides of the fraction.

How much does one extra percent of vacancy cost per year?

On this site's worked example — $32,700 of gross potential income — one point of vacancy is $327 of potential income. Net operating income falls by about $301 rather than $327, because the management fee is charged on collected rent and eases slightly. Cash flow falls dollar-for-dollar with NOI since debt service does not care how empty the building is.

Where the allowance lands in the income build-up is shown line by line on the NOI calculator page, its interaction with expense assumptions is tested against the 50% rule, and daily occupancy works differently enough in short-term rentals that the short term rental calculator treats it as its own input. For the leveraged view of the same deal, see DSCR.