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Rent Collection Loss Calculator
Collection loss is the rent billed but never collected — separate from physical vacancy. This calculator builds an annual loss number from delinquency rate, write-off share, late fee offsets, and eviction cost. Lenders treat this as economic vacancy in underwriting.
Industry avg 4-8%
Never collected
Filing + attorney + lost rent
Annual collection loss
$5,746
Loss as % of gross rent
2.74%
Net write-off (unrecoverable)
$4,536
Eviction cost total
$1,750
Late fee revenue (offset)
$540
Equivalent months vacant per year
0.33
Gross scheduled rent
$210,000
How the math works
Collection loss (also called bad-debt or credit loss) is rent billed but never collected — distinct from physical vacancy. Industry averages run 1-3% of gross scheduled rent in stable markets, climbing to 5-10% in workforce/affordable portfolios and during downturns. Late fees offset some loss but never cover the eviction cost when it comes to that.
Underwriting models typically add a separate "collection loss" line below physical vacancy. Lenders prefer 1-3% economic vacancy assumed even on Class-A assets. Hard collection (placing accounts with collection agencies) recovers 15-25% of written-off balances on average. Eviction filings cost $1,500-$5,000 in attorney + filing + lost rent depending on jurisdiction; pandemic-era moratoriums dramatically increased the cost in some markets.
How to Use
- Enter monthly rent and number of units.
- Enter monthly delinquent share (4-8% is industry norm).
- Estimate average months late before payment lands.
- Enter the share of delinquent rent never collected.
- Add average late fee per incident as offset.
- Enter expected evictions per year and full cost per eviction.
- Set the recovery rate via collections agencies.
Frequently Asked Questions
What's typical collection loss?
Class-A urban: 0.5-1.5% of gross. Class-B garden multifamily: 1.5-3%. Class-C and workforce housing: 3-7%. Affordable / LIHTC: 4-10%. Recession periods can double these. Always carry a separate collection-loss line in pro formas — many novice operators bury it inside vacancy.
Are late fees a meaningful offset?
Late fees offset 20-40% of the eviction-related cost on a typical portfolio but rarely cover the write-off itself. They mostly serve to push tenants toward on-time payment behavior. Most state late fee statutes cap fees at $50-$100 or 5-10% of monthly rent.
How do I reduce collection loss?
Tighter screening (higher income multiple, longer tenure verification, stricter eviction history), automated payment systems with auto-pay incentives, early-stage soft outreach (text reminders day 2 and day 5), and a written policy that consistently files notices on day 6-10 to keep the bargaining clock running.
When should I file eviction?
When the tenant misses the late-fee window with no payment plan in motion, or when the balance exceeds 1 month of rent. Most jurisdictions require a 3-day or 5-day pay-or-quit notice first. Filing too late means more rent loss; too early often costs more in legal fees than recovered rent.
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Vacancy Loss Calculator
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Eviction Cost Calculator
Per-eviction cost model.
Delinquency Cost Calculator
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Late Payment Fee Calculator
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