A rental building has 40 units and 38 of them are leased and inhabited. The occupancy rate is 95 percent. Occupancy measures the extent to which a property is being used or lived in.

High occupancy generally supports stable income; low occupancy signals leasing problems, excessive rents, or weak demand. Physical occupancy counts units or square footage occupied; economic occupancy also considers the rent actually collected versus potential rent.

Landlords monitor occupancy trends and adjust marketing, pricing, or property conditions accordingly. Lenders set minimum occupancy requirements before funding certain loans. For hotels and short-term rentals, occupancy is tracked nightly and is a core performance metric.

• Measure of how fully a property is used
• Expressed as a percentage of units or space
• Affects income stability and loan compliance
• Tracked closely by owners and lenders