Understanding Vacancy Loss
How we calculate. Loss = GPR × vacancy rate. The form uses the same arithmetic as the worked examples on this page. See our methodology and accuracy policy.
Real-world scenario: A typical Vacancy Loss case uses potential gross rent 100000 and vacancy rate (%) 8. Enter the same figures below to reproduce the worked path.
What is Vacancy Loss?
The dollar haircut implied by a vacancy assumption—useful alongside vacancy rate %.
- Same year as GPR
- Economic vacancy may differ
- EGI = GPR − loss in the simple model
The Formula
Vacancy Loss
Vacancy loss = Potential gross rent × (Vacancy % ÷ 100)
Worked Example
Scenario: Potential gross rent $100,000; vacancy 8%.
Step 1: Loss = 100000 × 0.08 = $8,000
Answer: Vacancy loss is $8,000.
Common Use Cases
- Pro formas: vacancy dollars
- Owner reports: leasing impact
- Budget variance: empty units cost
Pro Tips
- Segment by unit type
- Include make-ready downtime
- Watch concession equivalence
Limitations: Vacancy Loss results are educational real-estate planning aids—not appraisals, loan offers, or investment advice. Confirm figures with qualified professionals.
FAQ
Physical vs economic vacancy?
Physical is empty units; economic includes unpaid occupied units. Label which you model.
What if vacancy is 0?
Loss is $0.
Authoritative References
For real estate investing concepts, consult:
- National Association of Realtors — market context
- Investopedia — NOI — net operating income basics
- CFPB — homebuying education