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Vacancy and Credit Loss Calculator
The gap between gross potential rent and effective gross income (EGI) is rarely just physical vacancy. Concessions (free month, reduced rent) and credit loss (skips, bad debt) can drag economic vacancy 200-300 bps higher than the physical number. This calculator builds true EGI by separating each leakage so the underwriting model reflects the real revenue base.
Bad debt
Free rent given
Effective gross income
$555,000
Total revenue loss
$45,000
Economic vacancy %
7.50%
Physical vacancy
$30,000
Credit / bad debt
$9,000
Concessions
$6,000
How the math works
Effective gross income (EGI) = gross potential rent minus physical vacancy minus credit loss minus concessions. Economic vacancy is the combined haircut and is what really drives NOI — a 5% physical vacancy plus 1.5% bad debt and 1% concessions gives 7.5% economic vacancy.
Brokers often quote only physical vacancy. Underwrite to economic vacancy or you'll overshoot NOI by 200-300 bps.
EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.
Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.
Learn more about our review process on the EveryCalc methodology page.
How this calculator works
What this page estimates
This Vacancy and Credit Loss Calculator is built to give a quick, browser-based estimate for vacancy and credit loss. The gap between gross potential rent and effective gross income (EGI) is rarely just physical vacancy. Concessions (free month, reduced rent) and credit loss (skips, bad debt) can drag economic vacancy 200-300 bps higher than the physical number. This calculator builds true EGI by separating each leakage so the underwriting model reflects the real revenue base. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.
Calculation approach
The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.
Example workflow
For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.
Practical checks
- Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
- Run a low, base, and high case when the inputs are estimates.
- Check the related calculators below when the next decision depends on a different assumption.
How to interpret the vacancy and credit loss result
Best use
Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.
Cross-check
Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.
Watch for
Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.
This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.
Before relying on this vacancy and credit loss estimate
Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.
Confirm source numbers
Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.
Separate cash flow from total cost
A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.
Run conservative cases
Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.
Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.
How to Use
- Enter gross potential rent (asking rent × units × 12).
- Enter physical vacancy %, credit/bad debt %, and concession %.
- Read EGI, total revenue loss, and economic vacancy percentage.
Frequently Asked Questions
Stabilized credit-loss benchmarks?
Class A multifamily 0.5-1.5%; Class B 1.5-3%; Class C 3-6%. Workforce/affordable can run 5-10% in tough markets.
Are concessions netted from EGI or opex?
Concessions are revenue offsets, not expenses. Underwrite them as a top-line haircut just like vacancy.
Why does this matter for cap rate?
Buyers pay a cap rate on NOI. A 200 bps EGI overstatement cascades into a meaningfully overpriced bid — you'd find it during diligence rent-roll review and need to adjust.
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