Vacancy Rate Impact Calculator

Work out vacancy rate impact instantly with clear inputs, formula shown and shareable results.

About Vacancy Rate Impact Calculator

Vacancy bites harder than it looks because operating expenses barely fall when a unit is empty. Ten percent vacancy on a property with a twenty-five percent expense ratio removes over thirteen percent of net operating income, and since value is NOI divided by cap rate, the same proportion comes off the valuation.

Formulas

Effective gross income

EGI = gross potential income x (1 - vacancy - credit loss)

NOI

NOI = EGI - operating expenses

Worked example

With the default values below, Vacancy Rate Impact Calculator returns Net operating income of $756,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Gross potential rental incomeminimum 0: 1,200,000
Vacancy rateaccepts 0–60 %: 10 %
Credit lossaccepts 0–30 %: 2 %
Annual operating expensesminimum 0: 300,000

Results

Net operating income: $756,000.00
Vacancy and credit loss: $144,000.00
Effective gross income: $1,056,000.00
NOI lost to vacancy: 16.00% %

Step by step

1Values used
2Effective gross income
3NOI
4Net operating income= 756,000.00
5Vacancy and credit loss= 144,000.00
6Effective gross income= 1,056,000.00
7NOI lost to vacancy= 16.00 %

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation or tax into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is the Vacancy Rate Impact figure worked out?

EGI = gross potential income x (1 - vacancy - credit loss). Vacancy bites harder than it looks because operating expenses barely fall when a unit is empty.

Why does NOI fall by more than the vacancy rate?

Because expenses are largely fixed. The lost rent comes straight off the net line, so the percentage impact on NOI is the vacancy rate divided by the net margin.

What values do I need to enter?

This calculator takes 4 inputs: Gross potential rental income, Vacancy rate, Credit loss, Annual operating expenses. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.