Vacancy Rate Calculator
Work out your vacancy rate and what empty months cost in rent.
Details
365 for a full year
Vacancy rate
5.75%
Effective monthly rent
$1,885
Months empty a year
0.7
Rent lost / mo
$115
Days empty
21 of 365
This applies a vacancy rate to your rental income to give the effective income you can actually plan on.
It shows the annual loss in dollars alongside the percentage, and converts between a rate and the number of empty months it represents.
What a vacancy rate is
A vacancy rate is the share of the year a rental sits empty and earns nothing. It is deducted from gross rent to give effective gross income, which is the figure every other rental calculation should be built on.
The clearest way to think about it is in months. One empty month out of twelve is 8.33%. Two months is 16.7%. Once you see it that way, the 5% many investors assume starts to look optimistic, because 5% is barely over two and a half weeks.
Vacancy is not only about finding a tenant. Turnover time between tenants, cleaning, repainting and repairs all count, and they happen on every changeover whether or not demand is strong.
Assuming 5% means assuming a property is empty for under three weeks a year, including every turnover. That is achievable in a strong market, and optimistic in most.
What to enter
- Monthly rent
- Market rent for the unit. The calculation runs on the annual figure.
- Vacancy rate
- The percentage of the year expected empty. 5-10% is the usual planning range, and turnover-heavy properties sit higher.
- Number of units
- Multi-unit properties smooth vacancy out. One empty unit in eight is far less disruptive than one empty unit in one.
What this assumes
Vacancy is treated as an average. In reality it arrives in whole months, and one bad turnover can exceed a whole year's budgeted allowance.
This measures lost rent only. Turnover also brings direct costs such as cleaning, repainting and letting fees.
How to calculate vacancy loss on a rental
Multiply gross rent by the vacancy rate for the loss, or by one minus the rate for the effective income.
- vacancy rate
- As a decimal, so 8% is 0.08
- effective gross income
- What to use in cap rate and cash flow, not the gross rent
Annualise the rent. Monthly rent times 12, or the sum across all units.
Pick a realistic rate. Check what similar properties in your area actually experience. Then sanity-check it in months: 8% is one month, and one month is not unusual.
Work out the loss. Annual rent times the rate. On $30,000 at 8% that is $2,400.
Carry the effective figure forward. Use effective gross income in cap rate and cash flow. Using gross rent instead overstates every downstream result.
See a worked example: what one empty month costs
- Rent
- $2,500 a month, so $30,000 a year
- Vacancy rate
- 8%
Vacancy loss: $30,000 × 0.08 = $2,400.
Effective gross income: $30,000 − $2,400 = $27,600.
That $2,400 is almost exactly one month of rent, which is what 8% means in practice.
Budgeting 5% instead would have assumed only $1,500 of loss, leaving a $900 hole the first time a tenant leaves.
$27,600 effective, $2,400 lost
Frequently asked questions
- What is a good vacancy rate?
Under 5% suggests a strong rental market with quick turnovers. 5-10% is the normal planning range for single-family and small multifamily. Above 10% suggests weak demand, overpricing, or heavy tenant churn.
It varies a great deal by market and property type, so local experience beats any national figure. Ask local property managers what they actually see.
- How do I convert a vacancy rate into months?
Multiply by 12. So 8% is 0.96 months, effectively one month a year. 5% is 0.6 months, or about 18 days.
This is the single most useful check on a vacancy assumption. If a rate implies less turnover time than you have ever actually achieved, it is too low.
- Should I budget vacancy separately from maintenance?
Yes, they are different things and they can hit at the same time. Vacancy is rent you do not receive; maintenance is money you spend.
A turnover often triggers both at once, which is precisely why budgeting one number for both leaves you short in the month it matters.
- Does a longer lease reduce vacancy?
Usually yes, because vacancy is largely a turnover problem. Fewer changeovers mean fewer empty stretches and fewer letting fees.
The trade is that a long lease locks in a rent that may fall behind the market. In a fast-rising rental market that can cost more than the vacancy it prevents.
- How does vacancy affect cap rate?
Directly. Cap rate is built on net operating income, and NOI starts from effective gross income rather than gross rent.
On the example property, using $30,000 instead of $27,600 overstates NOI by $2,400 and inflates the cap rate accordingly. Listings that quote a cap rate on gross rent are, intentionally or not, quoting a better number than the property produces.
Problems people actually run into
Assuming a strong market means no vacancy
Even with a queue of applicants, a tenant moving out leaves the property empty while you clean, repaint, fix what the inspection finds and process the next application.
Two to four weeks is normal on a smooth turnover. That alone is 4-8%, before any period of genuinely weak demand.
Using gross rent in every other calculation
Vacancy gets budgeted, then forgotten. Cap rate, cash-on-cash and total return all get built on the full $30,000 instead of $27,600.
The overstatement compounds through every metric. Deduct vacancy once, early, and carry the effective figure through everything that follows.
Results are estimates for general information only and are not professional financial, medical, or legal advice. Read our full disclaimer.
Last updated: September 4, 2026
