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Commercial and investmentSubject 16 of 19

Vacancy rate

The percentage of available units, space or potential income not occupied or collected for the period measured.

Direct answer

What does Vacancy rate mean?

The percentage of available units, space or potential income not occupied or collected for the period measured.

Exam cue: Use consistent units and distinguish physical vacancy from vacancy and credit loss in an income statement.

What does it look like in a question?

New York example

Five vacant units in a 100-unit building equal a 5 percent physical vacancy rate.

Common exam trap

What should you not confuse it with?

Occupancy rate and vacancy rate are complements only when measured on the same basis.

Related commercial and investment terms

Cash flowMoney remaining or changing hands during a period after the receipts and payments included in the stated calculation.Effective gross incomeIncome expected or received after vacancy and collection loss, plus other property income included in the analysis.Gross leaseA lease in which the landlord pays specified property operating expenses from the rent received.LeverageThe use of borrowed money to finance part of an investment.LiquidityThe ease and speed with which an asset can be converted to cash without a substantial loss in value.Net leaseA lease under which the tenant pays specified property expenses in addition to rent.
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The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself. Links and locators were checked on August 26, 2026.

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