CalculateRealEstateROI

Cash Flow

What vacancy rate should I use in underwriting?

8% baseline; 10% for Class C; 5% for stabilized Class A in tight markets.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

8% baseline; 10% for Class C; 5% for stabilized Class A in tight markets.

Expanded explanation

Includes turnover days, listing days, and economic vacancy from bad debt. Submarket data trumps national averages. Underwriting at 0% is amateur.

Examples

  • 10-unit MF at 8% = $1,440/mo vacancy on $1,800 average rent.

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