Vacancy Loss Calculator
Calculate annual vacancy loss and effective gross income for a rental property at a given vacancy rate.
How to use this tool
- Enter monthly rent per unit, number of units and annual vacancy rate in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your annual vacancy loss and the full breakdown beneath it.
Vacancy is the silent killer of rental returns. Even a 5% vacancy rate on a $2,000/month unit costs $1,200/year. Always model vacancy when evaluating a deal.
Formula
Gross Potential Income (GPI) = Monthly Rent × 12 × Units
Vacancy Loss = GPI × (Vacancy Rate ÷ 100)
Effective Gross Income (EGI) = GPI − Vacancy Loss
Vacant Days per Unit = 365 × (Vacancy Rate ÷ 100)
How it works
This tool converts a percentage vacancy assumption into dollar and day figures, showing the real income impact of periods when a unit sits unrented. Gross potential income is the theoretical maximum if the unit is always occupied; subtracting the vacancy loss yields the effective gross income used in standard real estate underwriting.
The vacancy rate should reflect the realistic local market average, not the best-case scenario. The calculation assumes constant rent with no partial months; it does not model concessions or seasonal patterns.
Worked example
Worked example
- Monthly rent is $1,500 for 1 unit with an 8% vacancy rate.
- Gross potential income = $1,500 × 12 × 1 = $18,000/year.
- Vacancy loss = $18,000 × 0.08 = $1,440/year.
- Effective gross income = $18,000 − $1,440 = $16,560/year.
- Vacant days per unit = 365 × 0.08 = 29.2 days/year.
Annual vacancy loss is $1,440, leaving effective gross income of $16,560 (29.2 vacant days/year).
Key terms
- Gross Potential Income (GPI)
- The maximum rental income a property could generate if 100% occupied at market rent for all 12 months.
- Vacancy rate
- The percentage of time or units that are unoccupied in a given period; typically 5–10% is used for single-family rentals.
- Effective Gross Income (EGI)
- Gross potential income minus vacancy loss and credit loss; the starting point for computing net operating income.
- Vacancy loss
- The dollar amount of rental income lost because a unit is unoccupied or a tenant fails to pay.
- Net Operating Income (NOI)
- EGI minus all operating expenses; the pre-debt cash flow figure used to value income-producing properties.
Frequently asked questions
- What is a typical vacancy rate?
- National average vacancy for single-family rentals runs 5–8%. Multifamily averages 5–7%. Markets with high demand can see 2–3% vacancy; weaker markets can exceed 10%. Use local data for the most accurate underwriting.
- How do I reduce vacancy?
- Respond quickly to prospective tenants, price rent at market rate (not above), maintain the property well, and retain good tenants with reasonable rent increases. Each vacancy turnover costs 1–2 months of lost rent plus turnover costs.