Rental Vacancy Loss Calculator
Turn rent, units, and vacancy rate into effective rental income.
What it does
A rental quote means little until vacancy takes its cut. Gross potential assumes full beds all year; effective gross counts the months that actually pay. The gap between them decides whether a deal covers tax, insurance, repairs, and the loan.
The tool above draws that line. Enter monthly rent, unit count, and vacancy percent to get gross annual, vacancy loss, and effective gross. Defaults describe four units at $1500 with 8% vacancy, so the page opens solved at $72,000.00 gross, $5,760.00 lost, and $66,240.00 effective.
Vacancy has two parents: empty months and unpaid months. A quoted 8% blends both into one rate, which keeps screening fast. When you know turnover costs or street level downtime, rerun the page at 5% and 12% to bracket the offer instead of trusting one point.
The Census vacancy program and IRS rental guidance sit behind the references because they define how the market measures empty units and how the tax code treats rental income. Neither sets your street rate; local managers and fresh listings do. Use their frames, then price your block.
The table shows how the same building breathes at several vacancy levels. Carry effective gross forward into costs: management, repairs, tax, insurance, utilities, and debt service all come after this page. What is left is the number the purchase price must justify.
How to use
- Enter monthly rent per unit.
- Enter the unit count.
- Enter the vacancy percent.
- Read gross, loss, and effective gross.
- Rerun low and high vacancy to bracket returns.
- Carry effective gross into your cost and loan math.
Formula
- Rent
- Monthly contract rent per unit.
- Units
- Count of rentable units.
- Vacancy
- Annual vacancy share of gross potential, in percent.
Rent is monthly per unit and vacancy is an annual percent of gross potential. The page models economic vacancy only; concessions, bad debt, and operating costs sit outside it and come off effective gross in a full pro forma.
Worked example
Example: 4 units at $1500 with 8% vacancy
Four units rent at $1500 each with 8% vacancy. Find gross, loss, and effective income.
- Gross annual = 1500 x 4 x 12 = $72,000.00.
- Vacancy loss = 72000 x 8% = $5,760.00.
- Effective gross = 72000 - 5760 = $66,240.00.
- That is $480 lost per vacant unit month at this rent.
- Operating costs, tax, and debt still come off the effective figure.
- Test 5% and 12% vacancy to bracket the deal.
Reference table
| Vacancy | Loss | Effective |
|---|---|---|
| 3% | $2,160.00 | $69,840.00 |
| 5% | $3,600.00 | $68,400.00 |
| 8% | $5,760.00 | $66,240.00 |
| 12% | $8,640.00 | $63,360.00 |
| 15% | $10,800.00 | $61,200.00 |
Limits
- Economic vacancy only; no concession detail.
- No operating costs, tax, or loan math.
- One rent for all units; mixed rents need rows.
- Annual rate hides seasonal swings.
Common mistakes
- Underwriting on gross instead of effective.
- Borrowing a national rate for one street.
- Forgetting collection loss inside vacancy.
- Ignoring turnover repairs between tenants.
- Annualizing a peak month rent.
Try it yourself
Quick checks. Answers sit tucked under each question.
Duplex at $1200 with 5% vacancy?
Gross $28,800.00. Loss $1,440.00. Effective $27,360.00.
Six units at $2000 with 10% vacancy?
Gross $144,000.00. Loss $14,400.00. Effective $129,600.00.
Three units at $1800 with 6% vacancy? Work it by hand.
Gross = 1800 x 3 x 12 = $64,800.00. Loss 6% = $3,888.00. Effective $60,912.00.
Questions
Gross versus effective gross income?
Gross potential rent: full rent with every unit filled all year. Effective gross subtracts vacancy and collection loss before operating costs.
How is vacancy rate measured?
Divide vacant unit months by gross possible unit months. Four units with about 3.8 vacant months run near 8%.
What vacancy should I assume?
Use local survey data: Census vacancy reports plus property manager quotes for your street and class. National averages mislead single streets.
Does it include costs and loans?
No. This page stops at effective gross. Taxes, insurance, repairs, management, and loan payments still come off.
How do I add collection loss?
Multiply effective gross by (1 - loss share). A 2% collection loss on $66,240 keeps $64,915 before costs.
Can vacancy be 0 or 100?
Yes. Enter 0% for a fully leased year or 100% to see the empty building case.