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 (days mode): Single-family rental, $2,200/month. Last year: 22 days vacant between tenants (make-ready plus finding the 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) = $24,808
• Lost income = $26,400 − $24,808 = $1,592/year

Cutting that to 12 days saves $723 a year, which is the whole argument for having the unit listed and photographed before the outgoing tenant has finished packing.

Worked example (units mode), and why it gives two numbers: A 50-unit building at $1,200/month. Three units are empty today and a typical vacancy lasts 2 months.

• Snapshot vacancy = (3 ÷ 50) × 100 = 6.0%
• Gross potential rent = 50 × $1,200 × 12 = $720,000
• Income lost = 3 × $1,200 × 2 = $7,200
• Economic vacancy = $7,200 ÷ $720,000 = 1.0%

Those two figures are both correct and they measure different things. Six percent of the doors are dark right now; one percent of the year’s rent went missing. The gap exists because each of those three units gets re-let after two months rather than staying empty all year. Underwriting and lender vacancy allowances use the economic figure, so that is the one to quote when someone asks what your vacancy is. The snapshot is an operations number, useful for knowing how many units the leasing agent has to fill this week.

If the same three units sat empty for a full twelve months, the two figures would converge at 6% and you would have a genuinely troubled building.