Model Every Vacancy Scenario
Before It Happens
A 10% vacancy rate on a $2,200/mo rental costs you $2,640/year in lost rent — and wipes out your cash flow margin. See exactly how every vacancy assumption affects your bottom line before you commit.
What Is Vacancy — And Why Does It Matter?
Most investors underestimate vacancy. Here's the difference between the two types — and why getting this wrong destroys projections.
Physical Vacancy
A unit is physically empty — no tenant is living there. This is the most obvious form: turnovers between tenants, evictions, new construction leasing up, or properties being held off market for renovation.
Economic Vacancy
Revenue is lost even when the unit is occupied. This includes rent concessions (free first month), delinquent tenants not paying, below-market rent on long-term leases, and non-revenue units like a manager's unit.
How Vacancy Is Measured
The vacancy rate is expressed as a percentage of gross potential rent — what the property would earn at 100% occupancy. A 5% vacancy rate on $2,200/mo rent means you're budgeting for $110/mo (or $1,320/yr) in lost income.
How Vacancy Flows Through Your Returns
Vacancy isn't just "some lost rent." Every dollar of vacancy loss cascades through every return metric you care about.
Gross Potential Rent → Effective Gross Income (EGI)
Vacancy is subtracted from gross potential rent to arrive at EGI — the income you actually collect. Higher vacancy = lower EGI = less money coming in the door.
EGI − Operating Expenses = NOI
Net Operating Income drops dollar-for-dollar with every dollar of vacancy loss. Operating expenses don't decrease just because the unit is empty — taxes, insurance, and maintenance continue regardless.
NOI ÷ Debt Service = DSCR
As NOI falls, your Debt Service Coverage Ratio (DSCR) falls with it. Lenders require a minimum DSCR of 1.25. Below 1.0 means the property literally cannot service its debt from rental income alone.
NOI ÷ Cap Rate = Implied Property Value
In income-approach valuation, higher vacancy reduces NOI which reduces implied value. At a 6% cap rate, every $1,000 drop in annual NOI reduces your property's implied value by $16,667.
How to Reduce Your Actual Vacancy Rate
Vacancy is partially outside your control — but not entirely. Here's where experienced investors consistently outperform market averages.
Rigorous Tenant Screening
Quality tenants stay longer. A tenant who stays 3 years produces just one vacancy event vs. one who leaves every 12 months. Screen for income stability (3× rent), rental history, and credit. Vacancy time at turnover is unavoidable — but frequency is not.
Smart Rent Pricing
Pricing 5-10% above market to maximize gross rent often increases net vacancy loss more than it increases income. Run the math: is the extra $100/mo worth the risk of an extra 2-3 weeks vacant? Competitive pricing attracts more applicants and shorter listing time.
Fast Turnaround Speed
Every day a vacant unit sits un-repaired is lost income. Have your contractor list ready before the notice-to-vacate arrives. Pre-purchase appliance replacements. Know your carpet/paint vendors. Investors who consistently turn units in 7-10 days versus 21-30 days dramatically reduce annual vacancy rates.
Property Condition
Well-maintained properties attract better tenants and retain them longer. Deferred maintenance creates the worst cycle: poor condition → lower-quality applicants → faster wear → more vacancy → less money for maintenance. Regular CapEx reserves break this cycle before it starts.
How the Vacancy Scenario Modeler Works
Four steps from property selection to actionable scenario comparison.
Select Your Property
Choose any property from your portfolio using the property selector. The tool loads all your rent, expense, financing, and income data automatically — no re-entering numbers.
Drag the Vacancy Slider
Move the slider from 0% to 25% vacancy. Every position instantly recalculates all metrics — EGI, NOI, CFBT, DSCR — and updates the side-by-side comparison panel in real time. No waiting, no page reloads.
Compare Default vs. Scenario
The left column always shows your property's actual vacancy assumption. The right column shows the what-if scenario. A difference banner summarizes the impact: "At 12% vacancy, you'd lose $264/mo more than your current 5% assumption."
Save Scenarios
Found a meaningful scenario? Save it with a custom name — "Bear Case," "Lender Stress Test," "New Market Assumption." Load any saved scenario instantly to compare against current settings or share with partners.
Real-World Scenario Examples
Using a $2,200/mo rental with $1,580/mo in operating expenses and a $1,420/mo mortgage payment.
Strong market, excellent tenant, multi-year lease. You lose just one week of rent per year during a brief turnover.
Standard market assumption. Two to four weeks vacant per year across turnovers and minor concessions. Most lenders underwrite at 5-8%.
Difficult market, problem tenant turnover, or extended listing time. At 15% you're effectively losing 7-8 weeks of rent per year — often a sign something structural needs to change.
See Your Property's Vacancy Scenarios Now
Stop guessing what 10% vacancy would do to your cash flow. Run the exact numbers for your property in seconds.