The loss in the real estate business can never be avoided. So estimate the vacancy and loss of credit using the vacancy and credit loss formula.
When an investor buys a rental property he/she would want to keep it fully rented for the whole year, which seems to be an unrealistic expectation. Even though it is something that can never be avoided by estimating the upcoming loss using the vacancy and credit loss formula will help you to find solution and be aware of it.
What Is Vacancy Loss?: The time between the moving out of tenant and the new tenant begins is the vacancy loss.
What Is Credit Loss In Real Estate?: The time that the tenant is not paying their rent is called as the loss of credit.
How To Calculate Loss Due To Vacancy?: The loss due to vacancy and unpaid rent can be calculated by multiplying the value of scheduled gross income and the percentage of vacancy and loss of credit.
Analyzing the future losses of rental property with the factors of vacancy and loss of credit will give the investor an overview of their rental property loss. The vacancy and credit loss formula is the product of gross scheduled income and the loss percentage of vacancy and credit .