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Real estate & rental

Rental Vacancy Loss Calculator

What vacancy actually costs, including the turnover work that happens while nobody is paying.

Your numbers

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A two-year average tenancy is 0.5.
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$

Result

Annual cost of vacancy $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.

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.

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Questions

About this calculator

Is it worth reducing rent to keep a tenant?

Often, yes. If a turnover costs a month of rent plus two thousand in work, a 3% rent increase that triggers a move is a poor trade. Run the arithmetic before issuing the increase.

What vacancy rate should I budget?

Your own market's, plus turnover costs on top. In stable markets 5% to 8% of gross rent all-in is common; in student or short-term markets it is far higher.

The formula

annual cost = daily rent x vacant days x turnovers + turnover costs x turnovers

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