Occupancy Rate vs. Economic Occupancy Rate

For the new guys out there and not so new guys, here is a brief explanation of the difference between Occupancy Rate and Economic Occupancy Rate

Occupancy Rate is the number of apartments that have a contract attached to them; meaning there is a person that signed a lease to that apartments and lives there.

Economic Occupancy Rate much like the above is the number of apartments that have a contract attached to them; meaning there is a person that signed a lease to that apartments and lives there AND PAYS THEIR RENT.

As you can imagine there is a huge difference between the two and one should know both numbers when underwriting a deal.