How to Calculate Apartment Occupancy Rate

Occupancy rate for residential properties is a one of the most important financial factors that an apartment owner or property manager should consider when making operating decisions. Low occupancy rate might indicate prices that are too high or amenities that are lacking when considering comparable properties in the same area. High occupancy rates might indicate an opportunity to increase rent, thereby increasing profit. Many commercial real estate mortgages require the submission of financial reports, including occupancy rate on a monthly, quarterly and/or yearly basis in order to analyze if the lender’s position is secure. Occupancy should be calculated daily and averaged for each month.

Instructions

1. Obtain the total number of occupied apartments in the apartment complex.

2. Obtain the total number of apartments in the apartment complex that are available for rent. Do not include downed units (units needing repair), model units or units used by the management office.

3. Divide the total number of occupied apartments by the total number of available apartments.

Tips & Warnings

• Retaining current renters is the best way to keep occupancy rates high and turnover costs low. Always offer an incentive to existing occupants to entice them to sign another lease at renewal.

References

• Modern Property Management, Inc.: Vacancy/Occupancy Rate Calculation