Cap rate calculation: do you take into account VACANCY RATE?

[Edita D.]

Hey guys!

Do you take into account vacancy rate when calculating operating expenses? My cap rates are always lower since I take into account ALL my operating expenses:

-property insurance

-tax

-maintenance/repairs (10% of rent)

-HOA (if applies)

-property management fees (10% of rent)

-vacancy (depends on area between 10% to 20% of rent)

Basically, when calculating cap rate I take into account all expenses except for mortgage principal and interest. How about you?

Thanks!

Edita