Deal Metrics
What is vacancy rate?
Vacancy rate estimates how much rental income may be lost because the property is not occupied all the time.
Answer
Vacancy rate estimates how much rental income may be lost because the property is not occupied all the time.
Formula: Vacancy Loss = Gross Income × Vacancy Rate
Example: Monthly rent = $2,000 Vacancy rate = 5% Vacancy loss = $100/month
Why this matters: Ignoring vacancy makes deals look better on paper than they are in real life.
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