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Vacancy rate

# Vacancy rate

### What is Vacancy Rate?

The vacancy rate is used to determine how long a rental property is occupied in a year in terms of percentage. Properties that are vacant are not cash generating so minimizing the vacancy rate is important. You can create a vacancy rate across the entire portfolio or on per unit basis.

One important thing to note, vacancy rate should only be measured on the "rentable days." This means if you're doing gut renovation, the days where it's impossible to rent out should not be factored into the equation.

### How to calculate Vacancy Rate

$Number \, of \, days \, vacant \over Number \, of \, rentable \, days \, in \, the \, year = Vacancy rate$

### Vacancy rate example

Suppose I have 3 rental units and this year has 365 days.

• Unit 1 is vacant for 30 days.
• Unit 2 is vacant for 10 days.
• Unit 3 is vacant for 0 days.

My vacancy rates are as follows:

• Unit 1: 30/365 = 8.2%
• Unit 2: 10/365 = 2.7%
• Unit 3: 0/365 = 0.0%
• Portfolio: (30+10+0)/(365+365+365) = 3.6%