An apartment complex has 100 units and 8 of them are empty. The vacancy rate is 8 percent. That metric measures the share of available units or space that is not currently occupied.

Low vacancy rates signal strong demand and support rent growth. High vacancy rates indicate oversupply, weak demand, or management problems. Investors and lenders watch vacancy trends closely when underwriting income properties. Economic vacancy also considers space that is occupied but not producing full rent.

Seasonal patterns, lease expirations, and local job conditions all influence vacancy. Reducing vacancy may require rent adjustments, improved marketing, unit upgrades, or better tenant retention. A realistic vacancy allowance belongs in every pro forma.

• Percentage of units or space that is unoccupied
• Key indicator of demand and property performance
• Affects income projections and valuations
• Influenced by market and property-specific factors