219 empty unit-days across twelve units is $10,800 of rent that never arrived
Twelve units with 219 vacant unit-days across the year is a 5% vacancy rate and 95% occupancy. At $1,500 a month per unit, those empty days cost $10,800 — $900 a month averaged — and effective annual rent falls from $216,000 to $205,200.
Vacancy rate = vacant unit-days / (units x 365) ; Lost rent = potential rent x vacancy rate
Stating it in money rather than percentage is what makes the number act on decisions. A 5% vacancy rate sounds like a rounding allowance; $10,800 is a figure that justifies spending on marketing, on a faster turnaround between tenants, or on the small repairs that keep a good tenant from leaving.
Cleaning, repainting, listing and screening all follow a move-out
Vacancy rarely happens because nobody wants the unit; it happens between tenants. Each turnover carries costs the rate does not capture: making the unit ready, advertising, screening applicants, and any letting fee. Those frequently exceed the lost rent itself.
That reframes the economics of rent increases. Pushing rent up by $50 a month gains $600 a year; if it causes one extra turnover with a month empty and $800 of make-ready costs, the increase loses money. Retention is usually cheaper than re-letting, and the vacancy rate is where that shows up.
Market-dependent, but a healthy market runs around 5-8%
A well-run property in a balanced market typically shows vacancy in the mid single digits. Persistently near zero often means rent is below market — full occupancy with a waiting list is a pricing signal, not just good management. Persistently above ten usually points at price, condition, management or a weak local market.
The right benchmark is the local submarket rather than a national figure, and it moves with new supply. A neighbourhood absorbing several new buildings will show elevated vacancy across every landlord for a year or two, which is a market condition rather than a management failure.
Days empty, not rent uncollected
This measures physical vacancy — units with nobody in them. It does not measure economic vacancy, which also includes concessions, discounts and rent that was charged but never paid. A building at 95% physical occupancy with two non-paying tenants has far worse economics than the rate suggests.
It also assumes every unit rents for the same amount. Where unit sizes differ, weighting by rent rather than by count gives a truer figure — losing a large unit for a month costs more than losing a small one, and a simple day-count treats them identically.
Frequently Asked Questions
What is a normal vacancy rate?
It varies widely by market and property type, but many stable residential rentals run in the low-to-mid single digits. What matters is comparing your rate to local norms and tracking the trend; a rate well above the area average signals a problem to investigate.
Why does a small vacancy rate cost so much?
Because it applies to your entire potential rent. Even 5% of a large rent roll is a meaningful sum, and during a vacancy you may also pay to clean, advertise, and re-let, so the true cost can exceed the rent alone.
How do I lower my vacancy rate?
Common levers are competitive pricing, good maintenance, responsive management, lease renewals to reduce turnover, and minimizing the time between tenants. Each empty day is lost income, so faster re-letting directly improves the rate.
Should I use vacancy or occupancy?
They are two views of the same thing and always sum to 100%. Lenders and investors often quote vacancy when underwriting income; operators often track occupancy. This calculator shows both so you can use whichever your audience expects.
Does vacancy include non-paying tenants?
No. A unit occupied by a tenant who does not pay is a credit loss, not physical vacancy. To capture total lost income, add a credit-loss allowance on top of the vacancy figure this tool produces.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
Returns are assumptions, not guarantees. Actual results may vary because of market performance, taxes, fees, inflation, and timing. This is an educational projection, not investment advice.
Published the calculator with its formula, worked example, assumptions, limitations and a bespoke guide, and added an automated formula test suite covering it.
Verified that vacancy and occupancy always sum to 100%, and that lost rent reconciles to the empty days across the unit count.
Frequently Asked Questions now show on the page: 5 answers, checked in a page-by-page audit.
Add this calculator to your site
Responsive embed — and private: nothing your visitors type leaves their browser.