What is an ideal vacancy rate??

[Alain Perez-Majul]

Wanted to see what everyone thought about this. What is a healthy and ideal vacancy rate? There's a fine line between too low and uncomfortably high; if it's too low, you're more than likely leasing for under-market amounts, and if it's too high, you might be too overpriced. I've heard a high single digit vacancy rate is right on the money. Thoughts?

[Kevin Harrison]

Most people budget for 1 month of vacancy or 8%. This really depends on your market though. Places like San Francisco and NYC usually have almost no vacancy if it is a good unit because there is a shortage of stock there while places like the mid-west can run 5-12%. My unit in Ga is at the very top of the SFR market price but I have almost no vacancy (2% for fixing things during turnover) but I also keep the place immaculate as far a rental goes, that's way lower than the average for the area but it doesn't mean that im underpriced.

I think most people would tell you that as long as you're happy with your returns 0% vacancy is the best number and personally I think anything over 10% means you need to re-evaluate that asset baring special circumstances.