What it Costs to Have a Vacant Rental

 So this is going to be a quicker post. This week I have heard two stories about investment property owners that left their property vacant for an extended period of time. Investors refer to the lack of income from a property as Lost Rent.

One real estate investor owns a rental home. The home had been sitting vacant while the owner was determining what to do with it. The owner let it remain vacant for a period of 20 months. The unit would rent for $2,200 per month. Over that period of time the owner's lost rent was almost $44,000. This doesn't include the costs that the owner paid for property taxes, insurance, and the like.

I heard from another real estate broker about a property that he was going to list. The property had sat vacant for 10 years. The broker estimated that the owner's lost rent was over $250,000. This doesn't include the HOA fees, taxes, and insurance costs of maintaining a property.

The moral of the story: A vacant property has huge opportunity costs in lost rent to the owner. Now in both of these cases the property has appreciated significantly, but you can never count on that.