Calculating Rental Vacancy and Credit Loss

How To Calculate Rental Vacancy and Credit Loss
By , Guide

  1. Determine an expected percentage of loss due to vacancy and non-payment by checking that of comparable properties and the recent loss experienced by the subject property.Last year’s vacancy and credit loss from the subject property may have been 3% of net operating income. Other comparable properties experienced an average of 4%. Choose a value in the mix, let’s say 3.60%.
  2. Adjust your net operating income for next year by any anticipated rent increases. If you are anticipating a 5% increase in rent, and net operating income this year is $44,000, then:$44,000 X 1.05 = $46,200
  3. Calculate the expected monetary loss for next year due to vacancy and credit losses:$46,200(net operating income) X .0360 (3.6%) loss estimate = $1663.20.

What You Need

  • Calculator
  • Some estimate(s) of vacancy and credit loss percentages

Source: , Guide