How do I calculate occupancy rate for rental property?
Occupancy rate is the number of occupied units (or occupied area) divided by the total number of units (or total lettable area), multiplied by 100. A building with 90 of 100 units let is 90 percent occupied by unit count.
It matters because empty space earns no rent but still carries costs.
Commonly misread:
- Unit-based and area-based occupancy differ when units vary in size. State which one you report.
- Counting signed leases that have not yet started as occupied, or tenants in arrears as fully paying.
- Using a month-end snapshot only, which hides vacancy during the month. Time-weighted occupancy shows more.
Report both physical occupancy (someone is in the unit) and economic occupancy (rent actually collected compared with potential rent), because they can differ widely.
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