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The occupancy rate refers to the percentage of rental properties rented out to tenants against the total number of rental properties.
This is the opposite the vacancy rate which measure the level of vacant units against total units.
The variables used to measure occupancy rate depends on the objectives and preferences of the person measuring it.
Some common variable factors include:
- Number of units
- Floor area in square feet or square meter
- Rental in dollar value
For example, using number of units in the table below,
|Type||No. of units
The occupancy rate would be 6 rented units divided by 9 total units = 66.66%
For floor area in square feet with the data in the following spreadsheet,
The occupancy rate would be total rented space (sqft) of 4,500 divided by total space of 7,200 = 62.50%
Using rental value to tabulate the below information, we get,
The occupancy rate would work out with rental collection of $4,800 divided by total potential rental of $7,650 = 62.75%
Investors would be particular with these figures as the results from these calculations serves as an indicator of how well a real estate rental market is performing.