The true cost of Vacancy

Managing Your Property
18hFollow

The true cost of Vacancy

David Spurlock
Real Estate Agent · OH · Member since 2022 · 76 posts · 25 votes

While running my own numbers, I realized I was only factoring in a loss of rent for vacancy costs. Here in Columbus, service providers charge a service fee, usually around $30-$50 per gas & electric, even if you don't use any power. Add that on top of marketing costs ($100 per month), and you're looking at $160-$200 extra expenses each month on top of losss of rent. I was originally holding out to try and get a certain rent price, but realized I would save more in the long term by lowering it. I'm curious what other costs you all factor in that maybe I've missed?

2Reply
148 views

6 Replies

Jump to latestLatest
  • Patrick O'SullivanBusiness Member
    Property Manager · Phoenix, AZ · Member since 2024 · 542 posts · 208 votes
    16h

    One cost that often gets missed is insurance. Many landlord policies limit coverage once a property has been vacant for a while, so check your policy’s vacancy clause. You’ll also need to keep the heat on to protect the pipes. Add lawn care or snow removal, owner-paid water and trash, and the time spent on showings, and it adds up quickly. On lowering the rent, keep in mind a lower starting rent carries into future renewals. A small drop is often the better trade, but a big one can cost more over time than the vacancy it saved.

    [email protected]480-795-7938
    get MULTIfamily Property Management4.7222 Reviews
    WebsiteView Page
    0Reply
  • Matthew Tregoning
    Property Manager · Melbourne, FL · Member since 2019 · 383 posts · 158 votes
    4h

    One easy-to-miss cost is the extra work created by a longer vacancy: weekly property checks, keeping utilities active, and fixing small issues before they become visible during a showing. I’d compare the cost of a modest rent adjustment with the full carrying cost per vacant day, then set a date to reassess instead of holding out indefinitely.

    0Reply
  • Denise SuppleeBusiness Member
    Realtor · Willow Grove, PA · Member since 2017 · 1k+ posts · 649 votes
    4h

    You're right, vacancy costs more than just the rent you're not collecting. You still have utilities, insurance, taxes, maintenance and other expenses while the property is sitting empty. Then there are the costs to get it ready and find the next tenant.

    I wouldn't let a property sit vacant too long trying to get that extra $100 in rent. Sometimes getting a good tenant in a little sooner saves you more money in the long run.

    Spark Rental Co-Investing Club582 Reviews
    WebsiteView Page
    0Reply
  • Richard (Ryszard) Cieplechowicz
    Member since 2026 · 133 posts · 33 votes
    2h

    Good catch on the utility fees. Another cost people forget is turnover paint and cleaning after a longer vacancy, since a house that sat empty often needs more than a normal turn.

    I would set a date at the start, say 30 days, and drop the rent a small amount if there are no good applications by then. Track the actual carrying cost per vacant day so the decision is math and not hope.

    0Reply
  • Ametria Chaney
    Realtor · Memphis, Shelby County · Member since 2026 · 58 posts · 12 votes
    1h

    David, love this framing — vacancy is the silent deal-killer because it never shows up in the listing. Beyond lost rent, I'd add three costs investors routinely miss: the re-lease cost (make-ready, marketing, leasing fee or your time), the "stale listing" discount (a unit sitting 30+ days usually rents below market), and the maintenance snowball (small issues compound in an empty unit). On the acquisition side, this is exactly why I underwrite every rental with a realistic vacancy reserve instead of assuming full occupancy — the deal that only works at 100% occupancy doesn't work. A property with chronic turnover is often a pricing or condition problem wearing a vacancy costume. What's the average days-vacant you're seeing in your market?

    0Reply
  • Rachel Mazzanti
    Virtual Assistant · Remote · Member since 2020 · 110 posts · 49 votes
    1h

    You're already ahead of most investors just by counting the holding costs. The two I'd add: mortgage interest, taxes, and insurance still accrue while the unit sits empty, and leasing fees, usually half to a full month of rent if you use an agent.

    The practical fix on my company's client files: code every vacancy-related dollar to its own turnover category instead of burying it in repairs or utilities. At year end you can divide total turnover spend by number of turns and you finally know what a vacancy actually costs per unit. Most people guess half of the real number.

    And your instinct on the rent is the right math. Holding out two extra months for $50 more a month gains you $600 a year and costs you roughly $3,400 in lost rent and carrying costs. Almost every investor who runs that number once stops haggling over small rent differences.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free