Additionally, some sort of vacancy projection should be used in the inevitable event that you are between renters or someone does not pay.

And the repairs may be more than the missed rent during vacancy.

Also remember to factor in vacancy.

The current manager is doing nothing to fill vacancy either.Details that I have thus far:$6,659.33/mo + utilities ($17/sq ft + CAM + tax + ins)$500/mo approx current utilities (gas, electric & garbage)3800 sq foot building19 rooms + 1 larger room10 tenants currentlyShe offered to take over current managing and pay existing rent and utilities.

I was looking at a retirement city that has 25% vacancy rate.Here is some other data:-population 21k-population growth 14% (since 2000)-median sales price 129k-year-over-year return -12%-quarter-over-quarter -14%-sales price 5 years ago 192k-2006 sales price 270K-median rent listed 1250$ (-22% change since a year ago)I like the fact that there's definitely room to grow (between 2006 price and current), however I am concerned about 25% vacancy rate and decreasing rents.

So, figure out what a specific property in a specific area could/should rent for and then figure out if that would cover the expenses.Expenses include property management, taxes, insurance, any owner-covered utilities (ie water, trash, maybe even gas or electric), a vacancy buffer and then some reserves for maintenance and capital expenditures.

@Brant Griffin This applies to all vacation rentals, but how are the vacancy rates for vacation rentals in Palm Springs?

When the sun shines, {most} commercial properties will make good money with less management, but vacancies take longer to fill and you could have to carry the property, or a portion thereof, for a year or more.

Now you have a vacancy, that stinks like dogs, and it is Sept.

Using 70% after accounting for tax, insurance, management, repairs, vacancy etc leaving 218K.