Real estate & rental
Real Estate Vacancy Rate Calculator
Works vacancy rate, where a small portfolio cannot experience the average.
Result
An arithmetic tool, not financial or legal advice. Lending criteria, tax treatment and tenancy law all vary by state and change regularly. Confirm anything that affects a decision with a lender, an accountant or an attorney. Physical and economic vacancy differ, and economic is the more honest measure. A portfolio can show 4% physical vacancy on the day you count and 9% economic vacancy across the year, because units turn at different times and concessions reduce collected rent further.
Get a Free Business AuditHow the calculation works
Vacant unit-days divided by available unit-days, with the income loss that represents. The rate is a planning allowance, and it describes a large portfolio well and a small one poorly, because a single unit empty for two months in a four-unit building is a far larger percentage than any market average would suggest.
What moves the number
- Number of units, which determines how lumpy the experience is.
- Market conditions and local demand.
- Turnover frequency and how quickly units re-let.
- Rent level relative to the market.
Where this one goes wrong
A market vacancy rate applied to a small holding understates the volatility severely: an owner of two units experiences either zero or fifty percent at any moment, and planning on the average means being unprepared for the normal case. Hold a reserve sized to an actual vacancy rather than to a percentage. Persistent vacancy, as distinct from turnover vacancy, is usually a pricing signal and worth reading as one rather than waiting it out.
Before you quote
- Size reserves to a real vacancy, not to an average percentage.
- Separate turnover vacancy from persistent vacancy.
- Read persistent vacancy as a pricing signal.
Questions
About this calculator
Can I use the market vacancy rate for my property?
For planning across a large portfolio, yes. For a small holding it understates the volatility severely, since an owner of two units experiences either none or half at any moment. Reserves should be sized to an actual vacancy rather than an average.
What does persistent vacancy mean?
Usually that the rent is above what the unit will achieve in its current condition and location. It is a pricing signal rather than bad luck, and reading it as one is cheaper than holding an empty unit while waiting for the market to agree.
How is the rate calculated?
Vacant unit-days divided by available unit-days, which handles partial months and mixed unit counts correctly. Counting whole months instead distorts the figure whenever a tenancy starts or ends mid-month, which is most of the time.
The formula
physical vacancy = vacant units / total units; economic vacancy = rent lost / gross potential rent
Put this calculator on your site
Free to embed. Paste this where you want it to appear. It stays up to date automatically because it loads from BDEVY.
Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Total units. Enter your own figure; the page starts at 24.
- Vacant units. Enter your own figure; the page starts at 2.
- Total vacant days in the year. Enter your own figure; the page starts at 96.
- Average monthly rent ($). Enter your own figure; the page starts at $1,450.
The result updates as you type, so you can try a figure, see what it does to physical vacancy rate, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Total units | 24 |
| Vacant units | 2 |
| Total vacant days in the year | 96 |
| Average monthly rent | $1,450 |
What comes out
| Result | Value |
|---|---|
| Physical vacancy rate main result | 8.33% |
| Economic vacancy rate | 1.10% |
| Occupancy | 91.67% |
| Rent lost to vacancy | $4,576 |
| Gross potential rent | $417,600 |
Physical vacancy is 8.33% right now, but economic vacancy across the year is 1.10%, costing $4,576 of the $417,600 gross potential rent.
How sensitive the answer is
Holding everything else steady and changing only average monthly rent, this is what happens to physical vacancy rate. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average monthly rent ($) | Physical vacancy rate |
|---|---|
| $725 | 8.33% |
| $1,088 | 8.33% |
| $1,450 example above | 8.33% |
| $2,175 | 8.33% |
| $2,900 | 8.33% |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Total units
- A number, between 0 and 100000, starting at 24.
- Vacant units
- A number, between 0 and 100000, starting at 2.
- Total vacant days in the year
- A number, between 0 and 400000, starting at 96.
- Average monthly rent ($)
- A money amount, starting at $1,450.
What the results tell you
| Result | What it is |
|---|---|
| Physical vacancy rate | The headline result. A percentage. |
| Economic vacancy rate | A percentage. |
| Occupancy | A percentage. |
| Rent lost to vacancy | A money figure. |
| Gross potential rent | A money figure. |
What is not in this number
Property figures here exclude the costs that decide whether a deal works: vacancy, maintenance, management, capital expenditure and the transaction costs at both ends. A return that looks strong before those frequently does not survive them.
Keep going
Related calculators
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.