With over 98,362 rental units in Irvine, the vacancy rate stands at 4.0%, according to census data analyzed by Rate, Inc. But what does that number mean for your property's bottom line? The answer lies in understanding what is vacancy rate and how it directly impacts your rental income.
If your units sit empty too long, you're losing money and missing opportunities to grow your investment. Whether you're managing a few units or an extensive portfolio, your knowledge of how to control vacancy rates can be the key to maximizing your returns. Read on to learn how you can reduce vacancies and boost profitability.
What is Vacancy Rate?
The vacancy rate refers to the percentage of all available rental units in a property that are vacant at a given time. To break it down, the vacancy rate definition is calculated by dividing the number of vacant units by the total number of units and then multiplying by 100.
For instance, if you own a 10-unit apartment building in Irvine, and two units are empty, your vacancy rate would be 20%.
With the national vacancy rate measured at 6.60% for the second quarter of 2024, according to US Census data, it's important to understand your property's vacancy rate to give you a clear idea of how well your units are performing compared to the national and local averages.
Impact of Vacancy Rate on Profitability
Knowing the importance of vacancy rate is crucial for any landlord. A high vacancy rate directly affects your rental income.
An increase in vacancies can lead to reduced income and difficulty covering expenses like:
- Property maintenance
- Mortgages
- Taxes
With the cost of living in Irvine being relatively high, you need to keep your vacancy rate low to maximize profitability and maintain cash flow. This is especially true when the local rental market is strong and rents continue to rise, as seen with the 8.9% cap on rent increases since August 2024, according to ABC7.
Tracking Vacancy Rate
Keeping track of the vacancy rate metric on a monthly or quarterly basis allows you to see how your property is performing over time. Tracking these rental property metrics can help you make data-driven decisions on methods to attract tenants faster, such as:
- Setting competitive rent prices
- Adjusting marketing efforts
- Making property improvements
Maintaining a low vacancy rate can improve rental income by ensuring consistent cash flow. In a city like Irvine, where demand is high due to the strong job market and high-quality schools, your property should be well-maintained and priced competitively to help reduce vacancies.
Vacancy Rates and Why They Matter for Your Property
Understanding what is vacancy rate and how it impacts your rental property is just the start. By monitoring it regularly and using strategies to reduce vacancies, you can significantly improve your rental income and protect your investment.
At PMI Orange County, we help property owners achieve these results through expert management services, backed by state-of-the-art technology. Our real-time property updates, tenant screening, and marketing tools give landlords the edge needed to stay competitive in the market. Contact us today to learn how we can help you lower your vacancy rates and maximize your rental profits!
