Real estate & rental
Rental Vacancy Loss Calculator
Works the cost of vacancy, which is more than the rent that was missed.
Result
An arithmetic tool, not investment advice. Property returns depend on the local market, the condition of the building, financing terms and tax position, none of which a calculator can see. Verify the income and expense figures against actual statements rather than a seller's projection. The standard 5% vacancy assumption understates the real cost, because it counts only lost rent and not the cleaning, painting, repairs and letting fees that accompany every turnover. Retention is usually cheaper than a rent increase that causes a move.
Get a Free Business AuditHow the calculation works
Vacant days times the daily rent gives the lost income, with turnover costs added: cleaning, repairs, repainting, listing and the owner's or manager's time. The full cost of a turnover is substantially more than the empty period alone, which is what makes tenant retention worth more than most owners calculate.
What moves the number
- Days vacant between tenancies.
- Turnover costs including cleaning, repairs and repainting.
- Listing and screening costs.
- Whether utilities continue during the vacancy.
Where this one goes wrong
Set against the full cost of a turnover, a rent increase that prompts a good tenant to leave frequently loses more than it gains, and that comparison is worth making explicitly rather than assuming the higher rent wins. The other item usually omitted is that utilities, insurance, taxes and debt service continue through a vacancy, so the loss is the gross rent rather than the profit margin on it.
Before you quote
- Add turnover costs, not just the lost rent.
- Compare a rent increase against the cost of losing the tenant.
- Remember the fixed costs continue through the vacancy.
Questions
About this calculator
What does a vacancy really cost?
The lost rent plus turnover costs: cleaning, repairs, repainting, listing, screening and the time involved. The fixed costs also continue, so the loss is the gross rent rather than the profit on it, which makes the total well above the empty weeks.
Is a rent increase worth losing a tenant over?
Frequently not, once the full turnover cost is set against the additional rent. Making that comparison explicitly rather than assuming the higher rent wins is one of the more valuable calculations a small landlord can do.
How can turnover time be shortened?
By starting the work and the listing before the unit is empty where the lease and the outgoing tenant allow it. Most of the vacant period is sequencing rather than the work itself, and overlapping the stages removes weeks.
The formula
annual cost = daily rent x vacant days x turnovers + turnover costs x turnovers
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How to use this calculator
- Monthly rent ($). Enter your own figure; the page starts at $2,600.
- Days vacant per turnover. Enter your own figure; the page starts at 24.
- Turnovers per year. A two-year average tenancy is 0.5.
- Cleaning, paint and repairs per turnover ($). Enter your own figure; the page starts at $1,400.
- Advertising and letting fee ($). Enter your own figure; the page starts at $900.
- Units. Enter your own figure; the page starts at 1.
The result updates as you type, so you can try a figure, see what it does to annual cost of vacancy, 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 |
|---|---|
| Monthly rent | $2,600 |
| Days vacant per turnover | 24 |
| Turnovers per year | 0.5 |
| Cleaning, paint and repairs per turnover | $1,400 |
| Advertising and letting fee | $900 |
| Units | 1 |
What comes out
| Result | Value |
|---|---|
| Annual cost of vacancy main result | $2,176 |
| Rent lost | $1,026 |
| Turnover costs | $1,150 |
| Effective vacancy rate | 6.97% |
| Cost of each vacant day | $85.48 |
Vacancy and turnover cost $2,176 a year, which is 6.97% of gross rent. Each vacant day costs $85.48, and the turnover work costs more than the empty days do.
How sensitive the answer is
Holding everything else steady and changing only monthly rent, this is what happens to annual cost of vacancy. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Monthly rent ($) | Annual cost of vacancy |
|---|---|
| $1,300 | $1,663 |
| $1,950 | $1,919 |
| $2,600 example above | $2,176 |
| $3,900 | $2,689 |
| $5,200 | $3,202 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Monthly rent ($)
- A money amount, starting at $2,600.
- Days vacant per turnover
- A number, between 0 and 365, starting at 24.
- Turnovers per year
- A two-year average tenancy is 0.5.
- Cleaning, paint and repairs per turnover ($)
- A money amount, starting at $1,400.
- Advertising and letting fee ($)
- A money amount, starting at $900.
- Units
- A number, between 0 and 500, starting at 1.
What the results tell you
| Result | What it is |
|---|---|
| Annual cost of vacancy | The headline result. A money figure. |
| Rent lost | A money figure. |
| Turnover costs | A money figure. |
| Effective vacancy rate | A percentage. |
| Cost of each vacant day | 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.
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