1. What is Economic Occupancy?

Economic Occupancy measures the percentage of potential rent that is actually collected. It provides insight into the financial performance of rental properties by comparing actual revenue to maximum possible revenue.

2. How Does the Calculator Work?

The calculator uses the Economic Occupancy formula:

Where:

• \( Actual\_rent\_collected \) — Total rent actually received from tenants ($)
• \( Potential\_rent \) — Maximum possible rent if all units were occupied at market rates ($)

Explanation: The equation shows what percentage of potential income is being realized, accounting for vacancies, concessions, and collection losses.

3. Importance of Economic Occupancy

Details: Economic occupancy is crucial for property managers and investors to assess financial performance, identify revenue leakage, and make strategic decisions about pricing, marketing, and tenant retention.

4. Using the Calculator

Tips: Enter actual rent collected and potential rent amounts in dollars. Both values must be positive numbers. The calculator will compute the economic occupancy percentage.

5. Frequently Asked Questions (FAQ)

Q1: How is economic occupancy different from physical occupancy?
A: Physical occupancy measures the percentage of units occupied, while economic occupancy measures the percentage of potential rent collected, accounting for discounts and non-payment.

Q2: What is a good economic occupancy percentage?
A: Typically 90-95% is good for stabilized properties. Below 85% may indicate significant revenue loss from vacancies, concessions, or collection issues.

Q3: How often should economic occupancy be calculated?
A: Monthly calculation is standard for property management reporting, with quarterly and annual reviews for trend analysis.

Q4: What factors can affect economic occupancy?
A: Vacancies, rent concessions, bad debt, seasonal demand, local market conditions, and property management effectiveness.

Q5: How can I improve economic occupancy?
A: Strategies include reducing vacancy periods, minimizing concessions, improving rent collection, optimizing rental rates, and enhancing tenant retention.