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Rental Property Vacancy Rate Calculator
National average vacancy on residential rentals runs 7-9%. Most listing brochures quote 5%. The gap is where deals quietly fail. This calculator converts vacant days + turnover cost into the true effective vacancy rate to use in your underwrite.
Effective vacancy rate
7.98%
$1,436 lost per year · Realistic
Breakdown
- Annual gross rent$18,000
- Lost rent (vacant days)$1,036
- Turnover cost$400
- Effective annual rent$16,564
National average vacancy on long-term residential rentals runs 7-9%. Sellers and listing brochures typically quote 5%. Anything under 5% is aggressive — adjust your offer accordingly.
How to model vacancy honestly
Three rules that separate honest underwriters from sellers' pro formas:
- Include turnover cost. Even a 14-day vacancy with $400 of cleaning + paint costs 18-21 days of equivalent lost rent. Most brochures count only the vacant days.
- Match to property class. Class A urban-core properties: 4-6%. Class B mid-tier: 7-9%. Class C and tertiary markets: 10-12%. Single-employer towns: even higher.
- Verify with a local PM.Property managers will quote 12-month historical vacancy on comparable units in your submarket. That number always beats Zillow rent estimates and the seller's pro forma.
Vacancy is part of your effective gross income calculation, which feeds into NOI and cap rate. Under-modeling vacancy by 3 points inflates cap rate by 0.3-0.5 points — enough to make a marginal deal look like a winner.
Frequently asked questions
What is a good vacancy rate for rental property?
National average on long-term residential rentals runs 7-9%. Anything under 5% is aggressive — that assumes 18 days or less of vacancy per year, which is unusual outside of high-demand urban cores. For underwriting, use 8% as a default unless you have hard local data showing lower.
How do you calculate vacancy rate?
Vacancy rate = (annual vacancy loss ÷ annual gross potential rent) × 100. Annual vacancy loss = (vacant days × daily rent) + turnover costs (cleaning, repairs, listing fees). The calculator above does this math automatically. Most listing brochures quote 5%, which is optimistic — model 7-9% to be safe.
What's included in vacancy loss?
Two components: (1) lost rent during the actual vacant days between tenants, and (2) turnover cost — cleaning, paint touch-up, minor repairs, listing fees, and the property manager's lease-up fee (typically half a month's rent or 50% of one month's rent). Skipping turnover costs makes your vacancy rate look 1-2 percentage points lower than reality.
Why do sellers under-quote vacancy?
Because lower vacancy = higher pro forma cap rate = higher asking price. A 5% vacancy quoted instead of 8% can lift a property's apparent NOI by $400-700/yr on a $20k-rent rental — which inflates the asking price by $5-10k at a 7% cap. Always re-underwrite with your own vacancy assumption.
Does vacancy rate vary by market?
Yes. Tertiary markets and single-employer towns run 9-12%. Stable mid-tier cities run 6-9%. High-demand urban cores (Brooklyn, Boston, SF) can run 3-5%. Class C properties consistently run higher vacancy than Class A, even in the same city. Always use realistic numbers for your specific submarket — your local property manager can give you 12-month historical vacancy on comparable units.
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