Rental vacancy rate calculator
See what empty months cost and how much vacancy your property can bear.
Every number is an example, not a typical figure — use your own. Expenses are held fixed whatever the vacancy.
How does vacancy affect rental income?
Vacancy lowers the rent you actually collect, while most costs keep running. Take rent of $4,500 a month at full occupancy, which is $54,000 a year. At 5% vacancy you lose $2,700 and collect $51,300. With $18,000 of operating expenses the net operating income is $33,300, against $36,000 when fully rented, and after $22,000 of loan payments the cash flow is $11,300 a year. At 10% vacancy cash flow is $8,600, and at 20% it is $3,200. Each extra point of vacancy costs $540 a year, a flat 1% of full-occupancy rent. These are example inputs, not typical values.
What is break-even occupancy?
It is the occupancy at which rent collected exactly pays operating expenses plus loan payments: (operating expenses + debt service) ÷ gross rent at full occupancy. The Office of Thrift Supervision's examination handbook calls it the breakeven ratio. In the example, ($18,000 + $22,000) ÷ $54,000 = 74.1%, so vacancy can rise to 25.9% before cash flow turns negative. This calculator treats expenses as fixed; in practice a management fee that is a percentage of rent would shrink a little as vacancy rises, so the real margin is slightly better than shown, and utilities you pay for an empty unit make it worse.
How do I turn days between tenants into a vacancy rate?
Use the turnover mode. If a unit sits empty for D days after each tenant who stays Y years on average, the share of time it is empty is D ÷ (Y × 365 + D). Thirty empty days after a two-year stay is 3.95% vacancy, and sixty days is 7.59%. At 30 days the example cash flow is $11,868 a year. This formula is our own derivation: it counts every day between tenants, including cleaning and repairs, and ignores any rent you collect during the move-out month. Longer stays cut vacancy even if the gap between tenants is the same, which is one reason landlords value keeping good tenants.
What vacancy rate should I use?
Use your own history for that unit and neighbourhood, or the vacancy a local property manager or appraiser can document. We do not offer a standard percentage because we found no source for one that applies everywhere, and national vacancy statistics describe a whole market, not your building. If you are new, run the table: it shows the cash flow at 0%, 3%, 5%, 8%, 10%, 15% and 20%, so you can see how much room the deal has before you pick a number.
Is lost rent from a vacancy tax deductible?
No. IRS Publication 527 says that if you hold property for rental you may deduct the ordinary and necessary expenses of managing, conserving or maintaining it while it is vacant, including depreciation, but you cannot deduct any loss of rental income for the period it is vacant. The loss shows up as income you did not receive, not as a deduction. Ask a tax professional how your own situation is treated.
How much value does vacancy cost at a given cap rate?
If you enter a cap rate, the calculator divides the lost net income by it. At a 7% cap rate the $2,700 lost at 5% vacancy is worth about $38,571 of property value compared with full occupancy. That is the logic buyers and appraisers use when they set a price from stabilized income: persistent vacancy lowers value by the yearly loss divided by the cap rate. It is a rough measure, since a buyer would also judge whether the vacancy is temporary.
What are common mistakes when planning for vacancy?
The first is using 0% because the unit is rented today: every lease ends, and even a short gap costs rent; in the example each empty month costs $4,500. The second is counting vacancy only as lost rent. An empty unit still has property tax, insurance, loan payments and often utilities, and the turnover itself brings cleaning, repairs and marketing costs, which you can add to the expenses field. The third is mixing up vacancy with unpaid rent: a tenant who stays but does not pay is a collection loss, not an empty unit; this calculator only models empty time, so add unpaid rent to the vacancy percentage if you want it counted. The fourth is forgetting the cushion. At 5% vacancy the example still has $11,300 of cash flow, but at 20% vacancy it has $3,200, so decide in advance how much vacancy you could carry.
What are the limits of this calculator?
It is a one-year snapshot that assumes the same vacancy for the whole year and expenses that do not change with vacancy. It does not model rent concessions, bad debt beyond vacancy, turnover costs such as cleaning, repairs, marketing and leasing fees, or rent growth. Add those costs to operating expenses if you want them counted. It also does not include income tax or depreciation, and the lender's own underwriting may use a different vacancy figure than yours.
Estimates for planning only — not financial, tax or legal advice. Your lender or tax professional decides. Sources: Office of Thrift Supervision Examination Handbook, section 210, Appendix A (2009, archived by the OCC), the breakeven ratio; IRS Publication 527 (2025), “Vacant rental property.” The days-to-vacancy conversion is our own derivation. See also the rental property calculator, cap rate calculator, DSCR calculator and short-term rental calculator. How we check our calculators.