Vacancy is one of the biggest drags on rental property returns. This calculator shows the true cost of empty units — including lost rent and turnover expenses — so you can underwrite deals with realistic income assumptions.
Total Vacancy Cost
$9,180
$765/mo lost
What does this mean?
A vacancy rate of 7–12% is above average. This could indicate a soft rental market, above-market rents, or properties that need updates. Investigate whether rent adjustments or improvements could reduce turnover.
Vacancy loss is the income you don't collect when units sit empty between tenants. It's the gap between what a property could earn at full occupancy (Gross Potential Rent) and what it actually collects. Every underwriting model should include a realistic vacancy assumption.
The true cost is higher than lost rent. When a tenant leaves, you also face turnover costs: cleaning, minor repairs, painting, marketing the unit, showing it, and screening applicants. A $2,000/month unit that sits empty for one month with $1,500 in turnover costs really costs you $3,500 per turnover.
What vacancy rate should you use? Most lenders underwrite 5–8% for stabilized multifamily. But your actual rate depends on local market conditions, property condition, management quality, and rent positioning. Newer investors often underestimate vacancy — using 3% when their market runs 8–10%.
How to reduce vacancy: Price rents at market (not above it), maintain the property well, respond quickly to maintenance requests, screen tenants carefully, and offer lease renewals 60–90 days before expiration. Every day a unit sits vacant is money you never get back.
Keep running the numbers
Smart investors cross-check with multiple metrics before making an offer. Here are a few that pair well with this one.
Calculate Net Operating Income — the foundation of commercial real estate valuation.
Calculate the capitalization rate to evaluate a property's potential return based on its net operating income.
Find the minimum occupancy rate needed to cover all expenses.
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