No rental is occupied 100% of the time. See exactly how much an assumed vacancy rate costs you per year, and what effective income you should actually budget for.
▶ Run the CalculatorOpens live in the Rental Flow app, no account needed.
Take your full, 100%-occupied monthly rent and apply a realistic vacancy assumption, based on your market, property type, or your own turnover history, to see the dollar loss and the effective income that remains after it.
Use effective gross income, not the full advertised rent, when you budget or run other calculators like cap rate or cash-on-cash. It's a more honest picture of what the property actually brings in.
| Monthly rent | $2,000 |
| Annual gross rent | $24,000 |
| Vacancy rate | 5% |
| Annual vacancy loss | $1,200 |
| Effective gross income | $22,800 |
That $1,200 a year is rent you should plan to never collect. Building it into your numbers up front avoids surprises when a unit sits empty between tenants.
Vacancy rate is the share of potential rental income lost to empty units. Many landlords budget around 5% to 8%, but the realistic figure depends on your local market, property type, and how quickly you turn units. Even a well-run rental rarely stays at 0% over the long run.
Building a vacancy allowance into your projections keeps you honest. A property that looks profitable at 100% occupancy can slip into the red once normal turnover and the occasional slow month are counted, so it is safer to plan for some vacancy than to assume none.