An empty investment property is one of the most expensive problems in real estate.
It’s not just that you lose rent while it sits vacant. It’s that you still pay the mortgage. You still pay rates, insurance, and any maintenance that comes up. Every week the property is empty, money is leaving your account with nothing coming back.
Vacancy rate is the number that tells you how likely that is to happen — and it should be one of the first things you check before committing to any suburb.
Think of It Like a Restaurant
Imagine two restaurants sitting side by side on the same street.
Restaurant A always has a queue out the door. People are waiting for tables on weekday lunchtimes. Bookings are made a week ahead. The owner never worries about whether the place will be full.
Restaurant B always has empty tables. On Saturday nights, there are gaps. The owner runs specials and discounts to fill seats. Some weeks are fine; others are quietly concerning.
Which one would you rather own?
Now apply that same thinking to a suburb. Vacancy rate tells you whether it’s a Restaurant A location or a Restaurant B location — whether tenants are competing for properties, or whether landlords are competing for tenants.
What the Number Actually Means
In simple terms, vacancy rate is the percentage of rental properties in an area that are currently sitting empty with no tenant.
Here’s the maths: if a suburb has 100 rental properties and 3 are currently unoccupied, the vacancy rate is 3%.
The lower the number, the easier it is to find a tenant. The higher the number, the harder.
That’s all it is. No complex calculation. No specialist knowledge required. Just a percentage — and knowing what that percentage means.
How to Read the Numbers
Above 4% — Too many empty properties. Landlords are competing for tenants, which means longer vacancy periods, pressure to reduce rent, and more months where you’re covering costs yourself. We avoid these areas.
2%–4% — Average market. You’ll find tenants, but there’s competition. Rental income is less predictable. Proceed with caution and look at what’s driving the number.
Under 2% — Strong rental demand. Tenants are looking for properties, not the other way around. A new tenant can typically be found quickly after a vacancy ends.
Under 1% — Exceptional. The rental market is so tight that your property rarely sits empty for any meaningful period. This is what we look for.
Why This Hits Your Pocket Directly
The difference between a high and low vacancy area isn’t abstract — it shows up as real dollars.
Take a property renting at $800 per week.
In a high vacancy area, that property might sit empty for six weeks per year while you find a new tenant. Six weeks at $800 is $4,800 in lost rent — plus you’re covering all running costs during that time. That’s a very expensive problem that compounds across your portfolio.
In a low vacancy area, the same property might sit empty for one week before a new tenant moves in. One week at $800 is $800. And the rest of the year, your costs are covered.
Same property. Same rent. Same price point. But a dramatically different financial outcome depending purely on where it sits.
An empty property doesn’t just lose rent. It costs you everything while it sits empty.
How We Use Vacancy Rate
At Stonehhart, vacancy rate is one of the 24 factors we assess for every property we consider recommending.
We’re specifically looking for suburbs under 2%, ideally under 1%. Not because that number makes a suburb automatically right for you — but because it’s a baseline indicator of rental demand that protects you from one of the most common and costly investor problems.
A high-growth suburb with a 5% vacancy rate isn’t as compelling as it looks on paper. Capital growth matters. But if you can’t hold the property because it keeps sitting empty, that growth is academic.
The best property investments combine both: strong long-term capital growth potential, and a rental market where tenants want to be. That combination makes holding easy — which means you actually get to hold long enough for the growth to matter.
The One Question Vacancy Rate Answers
Vacancy rate answers one simple question: how easy will it be to keep my property tenanted?
Under 2% — strong. Under 1% — exceptional. These are the markets we target, because these are the markets where property investing is a financial strategy, not a constant stress management exercise.
Before you buy, check the vacancy rate. It takes five minutes and it could save you years of headaches.
Want to know the vacancy rate in the markets we’re currently recommending? Book a strategy session — we’ll walk you through the data.
