How can I calculate the vacancy factor for the fourplex?

In Selling Property - Asked by Kim P. - May 20, 2009
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Answer(s)

Paul S.
Broker/Agent
Glendora, CA

5% is quite common. However in some areas that would be very low. Mesa, Arizona for example has 35% vacant housing units. It might also depend on which side of the fence you are asking from? Seller's naturally estimate a very low or non-existant vacancy factor to keep the NOI up. A buyer would tend to estimate vacancy higher to reduce the NOI and thus reduce the price. If you are a buyer you will no doubt ask the seller to show you the income and expenses. From that you can calculate the actual vacancy.
Paul Sylvester, CCIM

May 20, 2009
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Llew Q.
Owner/Investor
Chula Vista, CA

You can call brokers in the area that is knowledgeable about the property you're looking at, and ask them what typical vacancy rates for something like that.

May 21, 2009
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Tai L.
Broker/Agent
San Diego, CA

Fourplex? I just know if there are 10 units and 8 are occupied, the occupancy rate is going to be 80% and the Vacancy is going to be 20%.
Total units occupied/total units available...then take 1 minus that number
Let me know if that's is the answer you are looking for

May 22, 2009
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Gregory G.
Broker/Agent
San Francisco, CA

5 - 10%

Aug 14, 2009
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William B.
Broker/Agent
Fort Lauderdale, FL

In FL, we are factoring a 10% vacancy rate since that is where Fannie and others are going to factor when looking at funding a deal. Even if our market is 7%, we always use 10%. This is what buyers are using in the declining market anyway since vacancies are rising and rents are dropping here. I agree wiht the above - find a knowledgable broker who works multi family in that submarket and works with lenders. They will know how to position the property correctly.

Aug 19, 2009
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