Vacancy rate describes unused rental capacity during a stated period. Physical vacancy measures empty units or vacant unit-days. Economic vacancy measures revenue not realized relative to potential revenue and can also reflect concessions or collection loss, depending on the reporting definition. A report should name the version rather than presenting one unlabeled percentage.
Vacancy affects both operations and underwriting. A realistic vacancy allowance belongs in an NOI or cash-flow forecast, while an operating review should retain the unit dates and lost-rent assumptions behind the percentage. Underwriting at 0% vacancy hides turnover and leasing risk even when every unit is occupied on the day the report is run.
Three defensible ways to calculate vacancy
A point-in-time physical rate divides vacant rentable units by total rentable units on one date. A period physical rate divides vacant unit-days by available unit-days. A dollar vacancy rate divides rent lost to empty units by gross potential rent. These methods are related, but they do not have interchangeable numerators or time periods.
Choose the method that matches the decision. A weekly leasing meeting may need vacant unit-days; a lender package may use a defined financial vacancy assumption; a rent-roll snapshot may simply show occupied and vacant units on its reporting date.
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Point-in-time: vacant units ÷ rentable units on the reporting date.
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Period physical: vacant unit-days ÷ available unit-days in the period.
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Dollar vacancy: rent attributed to empty units ÷ gross potential rent.
Worked example: units and days tell different stories
A four-unit property has one unit vacant on June 30, producing a 25% point-in-time vacancy rate. But if that unit became vacant on June 26, the property had 5 vacant unit-days out of 120 available unit-days during June, or about 4.2% period physical vacancy.
Neither result is inherently wrong. The first describes the month-end snapshot; the second describes June’s capacity. The report becomes misleading only when it compares one method with another or omits the date and denominator.
Vacancy rate is not the whole revenue gap
An occupied unit can still underperform gross potential rent because of a concession, below-market contract rent, unpaid charges, or a credit. Those differences belong in an income bridge rather than being mislabeled physical vacancy.
Keep the rent roll, lease dates, make-ready status, listing activity, contract rent, and ledger exceptions connected. That lets a small landlord decide whether the next action is finishing work, changing marketing, reviewing price, or following up on an occupied account.
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Editorial ownership
Written and maintained by the Aptoria editorial team
Editorial method reviewed July 28, 2026. Aptoria reviews scope, source fit, examples, limitations, links, and publication gates. This record does not claim attorney, CPA, lender, appraiser, or other independent professional sign-off.
Related terms
Investing metrics
Economic occupancy
The share of supportable scheduled rental revenue actually realized for a defined period, with the numerator, denominator, and deductions stated.
Investing metrics
Vacancy loss
The rent a property fails to collect because units sit empty, expressed in dollars or as a percentage of gross potential rent.
Investing metrics
Net operating income (NOI)
Net operating income is effective property income minus normalized property operating expenses, before debt service and owner-level income taxes.
Investing metrics
Cash flow
The cash left over each period after all income is collected and all expenses — including the mortgage — are paid.
Rent
Rent roll
A summary of every unit's rent, tenant, lease dates, and payment status across a property or portfolio.
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