Vacancy Expense
Definition:
Vacancy expense is the cost of a vacant rental unit, including the lost rent and the cost of maintaining the unit. It is a significant expense for landlords, and it can have a major impact on their profitability
Formula:
Vacancy Expense = Rent Per Unit * # of Vacant Units
Example:
Vacancy expense can be affected by a number of factors, including the location of the property, the size of the units, and the amenities offered. For example, a property in a desirable location with large units and a pool will likely have lower vacancy rates than a property in a less desirable location with small units and no amenities.