Vacancy rate in real estate is a metric that measures the ratio of the amount of time that a rental property is unoccupied vs the amount of time it could be rented throughout a period of one year.

It’s essentially the opposite of occupancy rate. When a rental property has a vacancy rate of 100%, it means that it doesn’t generate any revenue. A high vacancy rate is one of the main reasons many real estate investors struggle or fail in the business.


How to Calculate Vacancy Rate.

The vacancy rate for multifamily properties is usually calculated by taking the number of vacant units, dividing it by the total number of available units, and multiplying the result by 100.

Here’s the basic vacancy rate formula:

Vacancy Rate= Number of Vacant Units / Total Number of Available Units × 100

Single-family homes and other rental properties with one unit typically use the following formula:

Vacancy Rate= Number of Days Unoccupied / Total Number of Days Available for Rent × 100


Ways to Keep Your Vacancy Rate Low

Rental vacancy rate has a direct effect on rental income, which in turn affects your cash flow and return on investment. With a high vacancy rate, you may be unable to make your monthly mortgage payments and risk falling into foreclosure. The cost of tenant turnover is also high and can kill profitability.

While high vacancy rates can be a result of many factors, there are some specific strategies that investors can implement to keep them low. This should be the priority of every landlord who wants to be successful.

Here are some of the key ways to keep the vacancy rate for rental property low:

  1. Get properties in nice neighbourhoods

One of the best ways to ensure you attract tenants (and keep them) is to buy investment properties that are located in nice neighbourhoods with high job growth, good transportation, infrastructure, and essential amenities like schools, hospitals, restaurants, etc. Tenants are more comfortable living in such neighbourhoods. A rental property located in an undesirable area will always be harder to rent.

  1. Analyze rental properties before making a purchase

Even after you identify a good rental market, you still want to look into the occupancy rates of the rental properties for sale.


  1. Ensure your rental property is clean and in good condition

People want to live in premises that are clean and well-maintained. If your investment property is filthy and in need of many repairs, it will repel potential tenants.

To minimize vacancy, you always want to make a great first impression to potential tenants. Apart from ensuring that your property is operating in top condition, be sure to tidy up the exterior through landscaping, frequent repainting, trimming trees and shrubs, etc. This will help you attract and keep tenants.

  1. Improve your marketing strategy

To effectively market vacant units, you should use multiple marketing strategies (online and offline) to boost your chances of getting a tenant quickly. Clearly show potential tenants why your rental property is the best in the housing market and why they should consider living there.

  1. Add extra amenities.

Depending on what other similar rental properties in the area are offering, you can decide to stand out from the competition by offering a few unique amenities and making property upgrades. This may include a swimming pool, washing machine, gym, updated appliances, etc. Focus on amenities and improvements that won’t break the bank and are desirable to your target tenants.

  1. Get competent tenants.

To keep turnover low, be stringent with tenant qualifications. Getting high-income, stable, reliable, and responsible tenants will make your life as a landlord easier and also keep your vacancy rate down.


  1. Keep your rent in line with market rates

To stay competitive, you need to research the going rental rates for similar properties in your local market (rental comps). If you charge too much rent compared to what your competitors are charging, you are likely to be left with a vacant property. Look to offer your tenants a better deal than your competitors.


  1. Prioritize customer service

One of the easiest ways to keep vacancy rate low is to keep your tenants happy by quickly responding to their maintenance requests and other issues. Whenever possible, act quickly to resolve any issues that may make your tenants uncomfortable or pose a safety or health risk.

If tenants are unable to reach you or have to wait for long for an action to be taken, they are likely to vacate. Ensure good communication with your tenants to gain their trust and confidence.



There are a number of ways that landlords can lower their vacancy rates and this list is by no means exhaustive. We have just provided you with a few key strategies to get you started. Depending on your individual situation, you may need to employ other strategies.


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