How much vacancy actually costs
Lost rent is the visible half. The turnover that caused it costs nearly as much again, and most models count neither properly.
The short answer
Vacancy costs more than the rent you did not collect, because a vacancy is almost always caused by a turnover, and a turnover brings cleaning, repairs, listing and screening costs with it. Budgeting a flat vacancy percentage without also budgeting turnover costs understates the real figure by roughly a third.
The formula
lost rent = monthly rent x months empty
turnover cost = cleaning + repairs and repaint + listing and screening
cost per event = lost rent + turnover cost
annual cost = cost per event x turnovers per year
as a share of gross = annual cost / annual gross rent
Turnovers per year is usually a fraction. A tenancy averaging eighteen months means 0.67 turnovers a year, and that fraction is the honest way to carry an event that does not happen every year.
Worked example
Rent of $2,150 a month, one month empty between tenancies, and an average tenancy of eighteen months:
lost rent = 2,150
cleaning 250 · repaint and repairs 400 · listing and screening 150 = 800
cost per event = 2,950
turnovers per year = 12 / 18 = 0.667
annual cost = 2,950 x 0.667 = 1,967
gross rent = 25,800 → 7.6% of gross
a flat 6% assumption = 1,548, short by 419
The honest figure is 7.6%, not 6%. And if the flat sits empty six weeks instead of four, it becomes $2,683 a year, or 10.4%.
Why the empty period is usually longer than planned
Almost nobody moves out on the last day of the month and nobody moves in on the first. The gap is made of notice periods, viewing schedules, reference checks and the work you can only do once the property is empty.
Seasonality compounds it. A tenancy ending in November in a market driven by academic or summer moves can sit for two months rather than one, and that is not bad luck, it is predictable from the end date on the tenancy agreement.
The costs that only appear at turnover
Repaint is the big one and it is not annual. Most landlords repaint every second or third tenancy, so it should be carried as a fraction rather than either ignored or counted every time.
Then the small pile that always turns up when a property is finally empty and inspected properly: the blind that never worked, the seal that has gone, the door that catches. None of it is large and all of it lands in the same fortnight.
Letting fees, where you use an agent, are usually charged per tenancy rather than per month, which makes short tenancies disproportionately expensive in a way a monthly management percentage hides.
The lever that matters more than the rate
Tenancy length. Going from an eighteen month average to a thirty month average nearly halves the annual cost of vacancy, and it does so without changing the rent, the market or anything you have to negotiate.
This is the arithmetic behind the advice to be slow about raising rent on a good tenant. A $50 monthly increase is $600 a year. A turnover it triggers is $2,950 once, plus the risk of a worse tenant. The increase has to survive nearly five years to pay for the move it caused.
What this leaves out
- Turnover costs vary widely by property size, condition and local labor rates. The categories are general; the numbers are not.
- Excludes lost rent from a tenant who stops paying, which is a different and usually larger problem than vacancy.
- Assumes you re-let at the same rent. A turnover that lets you reset a below-market rent has an offsetting benefit not counted here.
This arithmetic is free to run in your browser — no signup, nothing held back.
Open the free calculatorCommon questions
- What vacancy rate should I use in my model?
- Work it out from your own tenancy length and void period rather than borrowing a number. If you have no history, five to eight percent is a common starting point for stable long lets, but budget turnover costs separately rather than assuming the percentage covers them.
- Does vacancy cost the same on a short-term let?
- No, it works differently. A short let has no single long void; it has unfilled nights spread across the calendar, and the turnover cost lands on every stay rather than every tenancy. The exposure is real but it is measured per night rather than per event.
- Is it worth dropping the rent to fill faster?
- Often yes, and the arithmetic is quick. A month empty at $2,150 costs more than a $100 monthly reduction does over a full year. Holding out for the last hundred dollars is one of the most expensive habits in small-scale letting.
Spreadsheets that do this
The formulas above, already built and checked — so you fill in your numbers rather than the arithmetic.
Related guides
Last reviewed 22 August 2026