Vacancy Happens: How To Be the Smart Investor That Plans For It

July 03, 2025

How Much Vacancy Should You Budget?

Vacancy: that awkward silence between tenants.

Your mortgage still hums along, but your income? Crickets.

Every investor knows vacancy happens. The smart ones budget for it. But how much should you plan for? The answer depends on your strategy—because not all rental income is created (or collected) equally.

🏡 Long-Term Rentals (aka "Set it and forget it… maybe")

Recommended Vacancy Budget: 5–8%

If you're in a stable market with good property management and tenant screening, 5% might cover brief turnover periods and the occasional flaky renter.

But if your local Craigslist ads include “Must love cats, weed, and never pay rent,” maybe budget closer to 8%.

Pro tip: Even with long-term tenants, assume at least one vacant month every 1–2 years.

🛏️ Short-Term Rentals (aka "Hotelier with disappearing towels")

Recommended Vacancy Budget: 25–35%

Short-term rentals are feast and famine. You might be 90% booked in July and crickets in February.

Factor in:

  • Seasonality

  • Booking gaps

  • Platform downtime

  • That one guest who thought check-out was “whenever”

If your STR isn’t averaging 65–75% occupancy annually, you may need to rethink the model—or your market.

🧍‍♂️🧍‍♀️ Co-Rooming (aka “Adult Dorm Management 101”)

Recommended Vacancy Budget: 10–20%

Co-rooming spreads risk across tenants, which is great... until three people move out mid-month to follow a drum circle to Asheville.

This model thrives on cash flow but requires active management. Turnover is higher, and mini-vacancies are common (one room here, another there). So budget like you're running a juggling act with rent checks.

Final Thought:

Vacancy isn’t the enemy. Surprise vacancy is.

Budgeting properly keeps you in the black—even when your rooms are empty.

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