Tenant Credit Loss Calculator

Lower-credit tenant bases produce higher bad debt. This calculator projects tenant credit loss by credit tier.

A-tier rent (annual)

B-tier rent (annual)

C-tier rent (annual)

A default rate %

B default rate %

C default rate %

Expected credit loss

$33,000

Loss / rent

2.06%

A-tier loss

$6,000

How the math works

Credit loss = Σ (tier rent × tier default rate). Stratify to see risk concentration.

If C-tier drives >40% of total credit loss, tighten screening or shift unit mix. Modest rent lift in higher-credit tier often out-earns chasing occupancy at C-tier.

How to Use

Enter A-tier rent, B-tier rent, C-tier rent.
Enter default rate by tier.
Read expected credit loss.

Frequently Asked Questions

Typical default rates?

A-tier (corporate, credit score 750+): 0.5-1%. B-tier (650-749): 2-3%. C-tier (<650): 5-8%. Varies by market and economy.

Recovery?

Collections recover 10-30% of defaulted rent. Security deposits cover 1 month (less for long-tenure C-tier units). Net credit loss = default − recovery.

Can I screen this out?

Higher minimum credit score + cosigner + larger deposit + rental history cut C-tier default in half. Tradeoff: slower lease-up. Calibrate to market dynamics.

What documentation matters here?

Written leases, move-in/move-out inspections with photographs, ledger entries showing every payment and charge, served notices with proof of service, and contemporaneous emails or texts. Courts weigh written evidence heavily; informal understandings rarely stand. Institutional operators run a monthly file audit to catch gaps before they matter. Good paper trails recover most of what's owed.