Vacancy Rate Calculator

Rental property vacancy rate measures the percentage of time (or units) that a property sits unoccupied and generating no income. It is a critical metric for real estate investors calculating actual cash flow versus theoretical maximum income.

Vacancy rate formula: Vacancy Rate (%) = (Vacant Days ÷ Total Available Days) × 100

For multi-unit properties: Vacancy Rate (%) = (Vacant Units ÷ Total Units) × 100

Effective Gross Income (EGI): EGI = Gross Potential Rent × (1 − Vacancy Rate)

Where:

• Gross Potential Rent (GPR) — maximum possible rent if all units are 100% occupied 365 days/year
• Vacancy Rate — expressed as a decimal for the EGI formula (5% = 0.05)
• Vacant Days — days a unit is available but unoccupied; distinguish from “make-ready” time (renovation/cleaning between tenants) which should be counted as vacancy

Annual income with vacancy: Annual Rental Income = Monthly Rent × 12 × (1 − Vacancy Rate)

What each variable means:

• Physical vacancy — units that are literally empty; zero rent collected
• Economic vacancy — includes concessions, free months, and rent-reduced units; physical vacancies aren’t the only income loss
• Stabilized vacancy — the long-term expected average; used in investment underwriting; typically 5–10% in most US markets
• Break-even occupancy — the minimum occupancy needed to cover all expenses; properties with high debt service need 85–95% occupancy just to break even

Reference: vacancy rate benchmarks by market type:

• Very tight market (NYC, SF, Boston): 2–4% vacancy
• Healthy balanced market: 5–8% vacancy
• Soft market: 8–12% vacancy
• Distressed market: 12%+ vacancy
• National average apartment vacancy (US 2023): ~6.4%

Worked example: Single-family rental, $2,200/month. Last year: 22 days vacant between tenants (make-ready + finding new tenant).

• Vacancy rate = (22 ÷ 365) × 100 = 6.03%
• Annual gross potential = $2,200 × 12 = $26,400
• Effective annual income = $26,400 × (1 − 0.0603) = $26,400 × 0.9397 = $24,808
• Lost income = $26,400 − $24,808 = $1,592/year

Reducing vacancy by 10 days (to 12 days) saves $726/year — an incentive to have the unit move-in-ready before the old tenant leaves.