If you’ve ever dipped your toe into the world of rental properties, you’ve probably heard the term vacancy rate thrown around. Investors talk about it. Lenders look at it. Buyers want to know it. Sellers need to justify it. And landlords live with it every single year. But what’s a vacancy rate, really? How do you calculate vacancy rate? And why does vacancy rate matter so much when evaluating a property’s performance?

At The Weeks Group, we’ve been landlords ourselves for many years. We’ve experienced the ups, the surprises, the month to month realities, the tenant turnovers, the zero vacancy stretches, and those occasional empty weeks that remind you why this calculation exists in the first place.

Whether you’re buying a rental unit and want to make sure the numbers make sense, or selling one and need to present your property in a way that builds confidence in its performance, understanding vacancy rate, and why it matters is absolutely essential.

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What Does Vacancy Rate Mean?

Simply put: vacancy rate is the percentage of time a rental unit sits empty during a given year. It’s a measurement of how often you’re not collecting rent. Think of it as the ‘downtime’ between tenants.

Every rental, even the best ones, eventually experiences a week or two with no tenant. That’s normal. But the consistent pattern of vacancy-  whether high or low -tells an investor a lot about the property’s stability, demand, and long-term performance.

So how do you calculate vacancy rate? Here’s the basic vacancy rate formula used across Canada:

Vacancy Rate = (Number of Vacant Units ÷ Total Units) × 100

Or, if you prefer (which we do)  to calculate it based on time instead of units:

Vacancy Rate = (Total Days Vacant ÷ Total Days Available) × 100

Both formulas are correct. The first one is used more for buildings (multi-residential). The second is helpful for single-unit landlords tracking downtime between tenants.

For example, if a 7-unit building has 1 unit vacant, the vacancy rate is 14.3%. If a single home rental sat empty for 18 days in a year, your vacancy rate for that unit is 4.9%. Investors typically want that number low because lower vacancy means better cash flow stability.

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A great location is essential when searching for a new investment. Why consider Barrie? Find out in the posts below:

• Is Barrie a Good Place to Live With a Young Family?
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Occupancy Vs Vacancy Rate

Now here’s an important contrasting term many people mix up: occupancy rate. If vacancy rate measures how often a unit is empty, occupancy rate measures how often it’s full. The occupancy rate formula is simply the opposite:

Occupancy Rate = 100% – Vacancy Rate

So a property with a 5% vacancy rate has a 95% occupancy rate. Same information, just said differently depending on the way an investor or lender prefers to look at. 

Why does vacancy rate matter?

Because it directly impacts revenue and property value. When buying, you want accurate numbers so you’re not falling for artificially inflated rental projections. When selling, you want to demonstrate stability, low turnover, and demand for your units. A properly documented vacancy history reassures buyers, strengthens your asking price, and can even improve financing terms a buyer.

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How The Weeks Group Helps Investors

The Weeks Group looks at vacancy rate not as a single number, but as part of a full multi-residential performance story. We consider tenant profile, rental demand in the neighbourhood, average turnover length of time, market absorption, local employment drivers, demographic shifts, etc., etc. 

These are the quiet indicators that separate a mediocre rental investment from a strong one. For instance, a building with a higher vacancy rate doesn’t automatically mean “bad property.” It may indicate poor management, dated units, bad pricing, or lack of decent marketing. All things that can be improved.

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Looking for more real estate investing advice? The posts below will help you make informed decisions:

• The Art of Selling a House With Tenants
• How Real Estate Investors Raise Their Capital
• How Can Real Estate Investing Help Grow Your Wealth Long-Term?

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Viewing the Big Picture

On the flip side, a building with nearly zero vacancy may still need reinvestment or significant upgrades to maintain that performance long-term. Knowing how to interpret the vacancy rate data-  not just calculate it- is where experience matters and is the key to proper decision making.

When we help families buy investment properties, we run the vacancy numbers with a critical eye. When we help sellers list multi-residential assets, we make sure the vacancy history and operational performance are clearly presented so the property’s true value is understood and justified.

Whether you’re buying your first rental or selling a multi-unit building, the vacancy rate tells a story. Our job is to read it, explain it, and help you make decisions.

If you want help analyzing a property, calculating realistic vacancy expectations, or preparing an income-based valuation, The Weeks Group is always here to guide you.

Do you have questions about how or when to invest in real estate? Our Barrie real estate agents are happy to help. Reach out to us today at 705.305.4174 or email hello@weeksgroup.ca to begin a conversation.