Vacancy rates play an important role in your quest to find the perfect rental property. Empty units don’t pay, and vacancies are one of the biggest expenses a property owner will face. As such, you need to determine just how often you can expect your unit to be empty so you can plan for it if/when it does happen. These rates are expressed as annual percentages (i.e., the percentage of time your unit is projected to be empty in a given year).
Finding these figures may not be as simple as you think, though. Unfortunately, there’s no website where you can plug in an address and click a button to find this specific calculation. However, there are some ways to obtain this information. Here are 4 of them:
- The Census. The Census Bureau tracks and publishes quarterly vacancy rates for all 50 states, as well as the 75 largest housing markets in the U.S. This information can be found on their website. While this is solid, evidence-based data, it unfortunately cannot give you a detailed snapshot of a specific neighborhood or area. For that level of detail, you need to move on to the next options I have listed.
- Ask an agent. Got a real estate agent you work with? If so you, you can ask them to do a market analysis on rental statistics for your chosen area. Using the MLS, they can access data such as how long a property was vacant, and how the original list price compares to the price of the property once it’s rented. Of course, the limitation here is that this will only provide you with info on properties that are currently listed on MLS.
- Interview a property manager. Asking a local property manager is one of the best ways to get accurate information about an area’s vacancy rate. These folks know their market, and since they are actively managing properties in the area, they can likely even tell you which streets perform better than others, as well as other information pertinent to your search.
- Work with a turnkey provider. The final option for finding an area’s vacancy rate is to work with a local turnkey provider to make your investment. Not only can they tell you vacancy rates of a given area, they can provide a ton of additional information and offer a host of other services as well to ensure your success with the investment.
When you’re running calculations on a market you’re interested in or a specific property itself, the vacancy rate provides critical details to help you make an informed decision. Use the strategies above to discover the vacancy rate, and if you don’t like what you find, then keep on looking.