vacancy rate

vacancy rate

The ratio of vacancies to total available rentals,over a particular period of time.There are three primary methods of calculating the vacancy rate: by number of units, square footage, or dollars of rental income. Beyond that, the calculations can be for a moment in time—a particular month—or for experience over the course of a year.Economic vacancy,which is the dollar value of vacancies rather than the number of units or square footage of floor space, is the most accurate indicator of the vacancy rate.When reviewing pro forma projections or past financial records, one must ascertain which method was used to calculate vacancies, however, because each method will result in a different rate unless all units are the same size and rent for exactly the same amount. See Example at occupancy rates for an explanation of the various calculations.