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Updated over 6 years ago on . Most recent reply

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Jay Helms
  • Rental Property Investor
  • Gulf Breeze, FL
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Vacancy Expense

Jay Helms
  • Rental Property Investor
  • Gulf Breeze, FL
Posted

If you own a property free & clear or when calculating for a cash purchase, do you still calculate a vacancy expense when determining cash flow?  Why or why not?

Cheers. 

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Linda Weygant
  • Investor and CPA
  • Arvada, CO
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Linda Weygant
  • Investor and CPA
  • Arvada, CO
Replied

You do include it.  The only things you don't include are items specific to financing - essentially, Principal and Interest.  

The vacancy is a reduction of Rental Income due to a place being vacant and has nothing to do with a house being financed vs paid off or purchased for cash.

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