What this calculator does
Vacancy rate measures how much of a rental property's available capacity went unrented over a given period. Using unit-days, rather than a simple count of vacant units, captures partial-period vacancies accurately: a unit vacant for half a month counts as half a unit-day of vacancy, not a full vacant unit or none at all.
A simpler version of the same idea, vacant units divided by total units, works fine when every vacant unit was empty for the entire period being measured. It becomes misleading as soon as units turn over partway through the period, which is why the unit-days version is the more precise standard for tracking vacancy over time.
The formula
Divide the total vacant unit-days over the period by the total available unit-days over the same period, then express that as a percentage. Available unit-days is the number of units multiplied by the number of days in the period.
| Term | Meaning |
|---|---|
| Vacancy rate | Vacant unit-days as a percentage of total available unit-days. |
| Vacant unit-days | The sum, across all units, of days each unit sat vacant during the period. |
| Total available unit-days | The number of units multiplied by the number of days in the period being measured. |
The inputs explained
| Field | What to enter |
|---|---|
| Vacant unit-days over the period | Add up the days each unit was vacant over the period; a unit vacant for 15 of the 30 days in a month contributes 15 unit-days. |
| Total available unit-days over the period | The total number of units multiplied by the number of days in the period, regardless of how many were actually vacant. |
When to use it
Tracking vacancy across a portfolio
Summing vacant and available unit-days across every unit in a portfolio gives one vacancy rate for the whole period, even when different units turned over on different dates.
Comparing vacancy against a market benchmark
A portfolio's vacancy rate is often compared against a local market average to judge whether turnover and re-leasing are running faster or slower than the surrounding market.
Estimating lost rental income
Vacancy rate applied to gross potential rent gives an estimate of income lost to vacancy over the period, a common input into a net operating income calculation.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How vacancy rate changes with vacant unit-days at a fixed total
A fixed 3,650 unit-days available, against a range of vacant unit-day totals.
| Vacant unit-days | Vacancy rate | Occupancy rate |
|---|---|---|
| 0 | 0.000% | 100.0% |
| 91 | 2.49% | 97.5% |
| 182 | 4.99% | 95.0% |
| 274 | 7.51% | 92.5% |
| 365 | 10.0% | 90.0% |
| 730 | 20.0% | 80.0% |
Questions
Why use unit-days instead of just counting vacant units?
Counting vacant units only captures a single point in time and misses how long each vacancy actually lasted. Unit-days account for the full period, so a unit vacant for one week is weighted very differently from one vacant for three months.
What is considered a normal vacancy rate?
It varies enormously by market, property type and season, so there is no single figure that applies everywhere. Comparing a property's own vacancy rate over time, and against similar local properties, is more informative than an external benchmark.
How does vacancy rate feed into net operating income?
Gross potential rental income is typically reduced by the vacancy rate to arrive at effective gross income, which is the starting point for calculating net operating income before operating expenses are subtracted.
Does vacancy rate include units offline for renovation?
That depends on how the metric is being tracked; some owners separate renovation downtime from market vacancy (units ready to rent but unoccupied), since the two have different causes and different fixes.
To turn income lost to vacancy into a full net operating income and yield figure, see the Finance category's cap rate calculator.