Work out vacancy rate impact instantly with clear inputs, formula shown and shareable results.
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.
Effective gross income
EGI = gross potential income x (1 - vacancy - credit loss)
NOI
NOI = EGI - operating expenses
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.
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.
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.