Vacancy Rate
Vacancy rate is the percentage of rental units or properties that are unoccupied and available for rent during a specific time period. It's calculated by dividing the number of vacant units by the total number of available units and is typically expressed as a percentage.
Example
“The apartment complex's vacancy rate dropped to 5% after they renovated the units and lowered rent slightly.”
Memory Tip
Vacancy rhymes with 'spacey' - when properties are spacey (empty), you calculate the vacancy rate.
Why It Matters
Vacancy rates help investors and landlords understand market conditions, rental demand, and potential income loss, while also indicating whether rental prices may need adjustment.
Common Misconception
A zero vacancy rate is often mistakenly viewed as ideal, when in reality a small vacancy rate (3-5%) indicates a healthy, balanced rental market.
In Practice
An apartment complex with 100 units has 8 vacant units, resulting in an 8% vacancy rate, suggesting the local rental market may be oversupplied or rents may be priced too high.
Etymology
From Latin 'vacare' meaning to be empty, combined with 'rate' from Latin 'rata' meaning calculated portion - literally the calculated portion of emptiness.
Common Misspellings
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