Rental properties are one of the most promising markets available when it comes to generating high-income rates. Most people investing in this sector have multiple rental properties available of various types.

For the property manager to better understand essential data like vacant units and the net operating income, they usually need to create a tool to calculate the vacancy rate. It is a crucial document for any real estate investor looking to maximize the average vacancy rate and succeed in the rental market.

In this article, we will show you the perfect document to calculate the vacancy rate formula and keep track of essential information regarding your rental prices and other data. Follow each step carefully to ensure the best results out of your rental units.

Before learning how to create your calculator for vacancy rates, it is important to understand what this document is. Here is a simple explanation:

The vacancy calculator for rental property is a document used by property owners and managers to calculate the percentage of unoccupied units regarding an apartment building or any other type of property. It is usually used to calculate the number of units occupied in a multi-unit property. Still, it can also be used to keep track of multiple vacant properties at a time.

It also helps real estate investors to identify the potential rental income of a property and how good of an investment it will be. The more complete and optimized your vacancy rate document is, the more accurate your cash flow and income data will be.

There are numerous reasons why any rental property owner has a template for their rental properties. The first one is obviously the optimization when calculating vacancy rates. But the data generated by the document can tell much more about your investments.

It also helps to maximize rental income and manage the maintenance requests of each property on the local market. You can adapt your template to any need, regardless of the number of vacant units you have for rent.

Now that you know why having a tool to calculate vacancy rate is important, it is time to see which other categories are often featured in this document. Each one has a different impact depending on the type of property you rent and the rental market you work on.

Make sure to analyze and see which ones fit your needs and goals. The more detailed and complete your vacant rate form gets, the better it will be for the property to which the vacancy rate refers.

Here are the main pieces of information that should be included:

Formula for Calculating the Vacancy Rate of a Rental Property

When using a vacancy rate calculator, the formula itself is pretty easy to do and can be done in seconds. It is the division of two basic pieces of information: The number of days vacant and the number of rentable days.

So it will look like this: Vacancy Rate = Number of days vacant / Number of rentable days

Although this is the essence of a vacancy rate calculator, you can add numerous pieces of information to your template to have even better control of data regarding your properties. It is important to have this data on an easily accessible document in case of increased demand or for calculating on an annual basis.

Net Operating Income

When dealing with rental property income and real estate investments, one of the most crucial information you need to know is the operational income of this investment. It is responsible for telling how good it is and if it is the correct decision to keep the property.

It is one of the easiest calculations to make and is directly related to the vacancy rate of your property. You can discover your operating income by listing all your income and subtracting all your expenses.

The result of this calculation is your NOI. When doing this calculation, you should not consider the mortgage payment value.

Cash Flow

Another factor that determines how good your rental units are is the generated cash flow generated. Its calculation is almost identical to the NOI, with only one difference.

The cash flow is how much money you have left after all expenses have been deducted. The mortgage should also be considered in this category, as this is the main difference when calculating cash flow.

Double-check to ensure you’re not missing a significant value. This way, your document precisely reflects the values received from your renters.

Return on Investment

The ROI is the most important information regarding any kind of investment. It is responsible for telling how much profit you made considering all the investments done in the rental units.

The ROI calculation is usually done once per year and will be directly influenced by your average vacancy rate and the money invested in the units. Real estate investors directly rely on the ROI to take the best course of action regarding each rental property and their vacancy rate.

Some of the most common items to include when calculating return on investment are:

• Amount of Cash Invested

• Capital Expenses

• Leverage Used to Purchase a Property

The ROI calculation is simple. Here is the formula for calculating it:

ROI = Annual Return / Total Invested

Gross Rent Multiplier

Another piece of information often featured when calculating vacancy rate is the GRM of a property. It is the calculation that compares the gross value received from rents in a given period compared to the price of the property.

It is a simple calculation that’s highly recommended to feature in credit reports. You can calculate it using the following formula:

GRM = Property Price / Gross Annual Income

If you want to create the perfect vacancy rate spreadsheet, these tips are for you. Follow them carefully, and you’ll have a document that is not only more optimized and complete but also generates the biggest impact possible when deciding which investments to focus on.

Use an Appropriate Tool for Your Vacancy Rate Spreadsheet

You will find multiple tools where you can create a document for occupancy rate. It is important to choose one that fits your needs and has the features to optimize your work.

Software like Microsoft Excel has numerous automation tools that allow you to do all the necessary calculations with only one click. Make sure to choose the option that suits the kind of template you’re trying to create.

Adapt It to the Kind of Property You’re Renting

Each type of property is unique and so are the main categories for evaluating its vacancy rates and ROI. When building a template for a specific kind of property, make sure that your document has all the relevant information for evaluating the overall return and other data that the investment is generating.

As previously mentioned, the tool you use is a crucial part of the process and can seriously impact the final performance of your form. You may find multiple options when it comes to creating a vacancy rate template. Each of these options has its own advantages.

Among all the options available, we highly recommend using Microsoft Excel. It is not only an industry standard but also has numerous automation tools that make your work even easier and more optimized.

If you don’t have a Microsoft Office activation key, you can get one at RoyalCDKeys for a considerably lower price. This way, you get access to all the programs from the package and still save money.

If you don’t want to create your template entirely from scratch, there is no problem. Here are some examples you can download and use for calculating your vacancy rates.

Don’t forget to edit them using Microsoft Excel to better fit your needs. This way, your template will be even more effective.

Here is a simple vacancy rate template created by ExcelDataPro containing only the calculator for taking note of how many units are still available. It can be used by different types of properties.

Get this template

Property rental is one of the most lucrative and promising types of investment you can make. But for it to work as expected, you must have a reliable tool for calculating the most vital data, like periods with high demand and other factors.

Thankfully, that’s precisely what the vacancy rate calculator does. With a single document, you can track multiple properties in a particular area and have detailed information on each one’s performance.

Now that you know everything you need about vacancy rates and how to manage your investments better, it is time to start creating your own template. Follow each step carefully, and don’t forget to use Microsoft Excel to have the best results and positive impacts on your spreadsheets.