The formula
How to calculate vacancy rate
The vacancy rate is the share of the year a property sits empty. It is the assumption most often set too low in rental projections, and the one that most reliably turns a modelled profit into a real loss.
Count every empty day, including the gap between tenancies for cleaning, repairs and re-letting. Two weeks between tenants once a year is already a 4% vacancy rate.
What to enter:
- Days vacant per year (days)
- Monthly rent
The result updates on every keystroke. The URL updates too, which makes the filled-in version easy to bookmark or send to someone else.
Where a figure is not immediately to hand — a precise interest rate, an exact balance — a reasonable estimate is a perfectly good starting point. Because every result updates instantly, refining a rough guess into the real figure once you have it takes a moment, and nothing about the calculation depends on getting it exactly right on the first attempt.
Why vacancy rate matters
The formula behind vacancy rate is standard and has not changed in decades; what changes is the situation it gets applied to. Two households can run the identical calculation and land on very different conclusions once their own numbers — income, rate, term, balance — are dropped in, which is why a generic textbook example is less useful than a calculator you can adjust to match your own circumstances.
This tends to come up when comparing two concrete alternatives — two lenders, two savings products, two ways of structuring the same decision — rather than in the abstract. Run both scenarios through the same calculator with the same assumptions and the comparison becomes fair, because the only thing changing between the two results is the number you are actually trying to test.
It is also worth being clear about what a single figure like this can and cannot settle on its own. It answers the specific question the formula was built to answer, and nothing more — a favourable vacancy rate result does not automatically mean a decision is a good one overall, since plenty of other factors that a formula cannot capture, from personal circumstances to how comfortable a commitment feels, usually matter just as much as the arithmetic. Use the number as one solid input among several rather than the whole of the decision.
Where the same calculation needs to be run for several different scenarios side by side — three loan offers, two savings plans — the fastest approach is usually to open the calculator in a second browser tab for each one, so that the results can be compared directly rather than overwriting each other in a single set of fields.
Worked example
A concrete run-through, using the values already in the fields:
- Days vacant per year: 24 days
- Monthly rent: 1,400
That gives:
- Vacancy rate: 6.58 %
- Rent lost per year: 1,104.66
- Effective annual rent: 15,695.34
These figures are only the calculator's own starting values, included so the working is visible rather than hidden inside the tool above. Replace them with your own numbers and the same arithmetic applies — nothing about the method changes, only the inputs feeding it.
Reading the result
Five to eight percent is a realistic planning assumption for standard residential lets. Student properties, short lets and anything in a weak local market need more; a long-term tenant in a high-demand area may deliver zero for years.
Where this goes wrong. Modelling on the last tenant. One five-year tenancy does not make 0% a safe assumption — voids are lumpy, and the cost of getting this wrong lands in a single year rather than being spread.
A useful check on any unfamiliar result is to compare it against a rough mental estimate first — round the inputs to convenient numbers and see whether the calculator's answer lands in roughly the same territory. A wildly different figure usually means one of the fields was entered in the wrong unit, most often a percentage typed as a whole number where a decimal was expected, or the reverse.
Around 5% for UK residential lettings in a healthy market, equating to roughly 18 days a year. Areas with weak demand or high tenant turnover run considerably higher.
Start marketing before the current tenancy ends, price slightly below the top of the market, and keep good tenants by handling repairs promptly. A month's void costs more than a modest rent reduction over a year.
The answer it gives you is vacancy rate. With 24 days days vacant per year and 1,400 monthly rent, that comes to 6.58 %. Change any field and the figure moves with it.
Whenever one of the underlying figures changes — a new interest rate, a different balance, an updated term — since the result only reflects what is currently in the fields. There is no need to keep a separate record of past results; the web address for a filled-in version already carries the figures used to produce it.
Not unless a tax rate or a fee is explicitly one of the inputs above. Where it is not, the figure shown is a gross calculation, and any tax due depends on your personal circumstances and current tax rules, which are worth checking separately.
The arithmetic itself is exact — the calculator applies the formula shown above precisely, with no rounding until the final figure is displayed. The uncertainty, where it exists, is entirely in the inputs: an estimated rate or an approximate balance carries that same approximation through to the result.