Financial tracking of lost income to vacancy? How to Quickbooks?

[Brian Black]

I am wanting to get a good idea of my TRUE vacancy rate including time lost to rehab etc...

My accountant suggested creating two line items to book both a lost revenue income and an offsetting
lost revenue expense for the same amount…just so you could see the activity on a leger.

Is there a better way?

THANKS!

BHB

[Greg Scott]

This concept is something that is common in the apartment industry.  It works like this:

• Gross Potential Rent = Typical market rent times the number of units.  This is intended to represent the maximum amount of rent you could possible collect
• Subtract Loss to Lease - If market rent is $1000 but someone has a lease for $900, you "lose" $100 every month until either their rent is increased or someone new moves in.
• Subtract Physical Vacancy - Pretty obvious
• Subtract Non-Revenue Units - If you have a unit that is unrentable, such as one turned into an office
• Subtract Bad Debt - Here is where you capture the rent that should have been paid but wasn't

The total of all of these should equal the actual rent you collected.

In the apartment space, most of us use purpose-built accounting software that handles all of this.  I wouldn't know how to set this up in Quickbooks.