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A vacancy is a function of time.
You must know your numbers and make all decisions based on numbers, not emotions. Here’s how it works:
Vacancy cost is a function of time. The more time a property sits vacant, the more money it will cost you. Below is an example of a single-family home renting for $1,000 per month.
Monthly rent = $1,000
Daily rent = $33.33
Annual rent = $12,000
The maximum annual rent is $12,000.
If the property is vacant for one month out of the year, the annual rent falls to $11,000 or $917/mo.
If vacant for two months, the annual rent would be $10,000 or $833/mo.
Each day the property sits vacant it is costing the property owner: $33.33
There are also other costs to consider, such as utilities. You see, when the property is vacant in the winter, the heat needs to be kept at a reasonable temperature in order to keep the pipes from freezing.
There is also lawn maintenance. Between spring and fall is where you will need to continue to mow your lawn, weed-eat, and trim your bushes.
Having a vacant property goes along with some additional risks such as storm damage, a water leak that does not get reported, and even vandalism. Make sure you account for these expenses while your property is vacant.
Vacant & Unoccupied Property Insurance is another option to help you, but may not cover all costs associated with having a vacant property. Read more about Vacant & Unoccupied Property Insurance Here.
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