Physical vs Economic Vacancy
Physical vacancy measures empty units. Economic vacancy measures lost rent value, including concessions, bad debt, and below-market occupancy effects.
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Use physical vacancy to understand occupancy. Use economic vacancy to understand income loss.
Physical vacancy is best for unit availability tracking.
Economic vacancy is better for NOI and valuation analysis.
A property can look highly occupied but still have meaningful economic vacancy through concessions or unpaid rent.
Occupied but discounted units
If 95% of units are occupied but many tenants receive concessions, physical vacancy looks low while economic vacancy can still reduce effective income materially.
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When should I use Physical vs Economic Vacancy?
Use physical vacancy to understand occupancy. Use economic vacancy to understand income loss.
Which calculator should I open next?
Start with Vacancy Rate Calculator, then use the related calculator workflow to validate the result from another angle.
Use this guide with the full Property Performance Calculators
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