Vacancy Rates - Vacancy shows the current number of un-rented units.
How do you calculate the vacancy rate?
This is typically calculated on an annual basis and is shown as a percentage.
Multiply the number of vacant units by 100.
Divide the result by the total number of units in the property.
For example, if an apartment with 10 units has two vacant units, you would multiply 2 x 100, giving you 200. Then divide by 10 units for a 20% vacancy rate.
Why are vacancy rates important?
Vacancy rates are ultimately aimed to be kept as low as possible, but they will always happen and need to be accounted for. A sound investor can not rely on a tenant to pay on time and to stay in and maintain the premises in a satisfactory manner.