An empty investment property is one of the most expensive problems in real estate.
While it sits vacant you lose the rent, and you still pay the mortgage, the rates, the insurance and any maintenance that comes up. Every week it’s empty, money leaves your account with nothing coming back in.
Vacancy rate tells you how likely that is to happen, and it should be one of the first things you check before committing to a suburb.
Think of it like a restaurant
Imagine two restaurants side by side on the same street.
Restaurant A always has a queue out the door. People wait for tables at weekday lunch, bookings are made a week ahead, and the owner never worries about filling the place.
Restaurant B always has empty tables, even on Saturday nights. The owner runs specials and discounts to fill seats, and some weeks are fine while others are worrying.
Which one would you rather own?
Apply the same thinking to a suburb. Vacancy rate tells you whether it’s a Restaurant A or a Restaurant B location, meaning whether tenants are competing for properties or landlords are competing for tenants.
What the number means
Vacancy rate is the percentage of rental properties in an area that are sitting empty with no tenant.
If a suburb has 100 rental properties and 3 are unoccupied, the vacancy rate is 3%.
The lower the number, the easier it is to find a tenant, and the higher it is, the harder.
There’s no complex calculation and no specialist knowledge involved. You only need to know what the percentage means.
How to read the numbers
Above 4% means too many empty properties. Landlords compete for tenants, which brings longer vacancies, pressure to cut the rent and more months of covering costs yourself. We avoid these areas.
2% to 4% is an average market. You’ll find tenants, but there’s competition and rental income is less predictable. Be cautious and look at what’s driving the number.
Under 2% shows strong rental demand. Tenants are the ones searching, and a new tenant can usually be found quickly after the last one leaves.
Under 1% is exceptional. The rental market is so tight that your property rarely sits empty for any meaningful time. This is what we look for.
How it hits your pocket
The difference between high- and low-vacancy areas shows up in real dollars.
Take a property renting at $800 a week.
In a high-vacancy area, it might sit empty for six weeks a year while you find a new tenant. Six weeks at $800 is $4,800 in lost rent, and you’re covering all the running costs during that time, a loss that adds up across a portfolio.
In a low-vacancy area, the same property might be empty for one week before a new tenant moves in. That’s $800, and your costs are covered for the rest of the year.
It’s the same property at the same rent and price, with a very different financial result purely because of where it is.
How we use vacancy rate
At Stonehhart, vacancy rate is one of the 24 factors we assess for every property we consider recommending.
We look for suburbs under 2%, ideally under 1%. A low number doesn’t make a suburb right for you on its own, but it’s a baseline sign of rental demand, and it protects you from one of the most common and costly problems investors face.
A high-growth suburb with a 5% vacancy rate is less appealing than it looks on paper. Capital growth matters, but if you can’t hold the property because it keeps sitting empty, the growth doesn’t help you.
The best property investments combine strong long-term growth potential with a rental market where tenants want to live. That makes the property easy to hold, so you hold it long enough for the growth to matter.
The question vacancy rate answers
Vacancy rate answers one question: how easy will it be to keep my property tenanted?
Under 2% is strong and under 1% is exceptional. Those are the markets we target, because in them property investing works as a financial strategy instead of a constant source of stress.
Before you buy, check the vacancy rate. It takes five minutes and could save you years of headaches.
Want to know the vacancy rate in the markets we’re currently recommending? Book a strategy session and we’ll walk you through the data.
