De Claron Ltd

Express Accountancy services at affordable prices


Property Investment Reporting

Company Secretarial Services

Home Contact Us Site Map About Us Help Downloads


Rental Vacancy and Credit Loss

Rental Vacancy and Credit Loss (RVCL) in real estate is the loss of rental revenue due to vacant units and non-payment of rent.

To calculate RVCL:

  • Determine an expected percentage of loss due to vacancy and non-payment by checking comparable properties and the recent loss experienced by the subject property.Last year's vacancy and credit loss from the subject property may have been 4% of net operating income. Other comparable properties have experienced an average of 5%. Select an average value such as 4.50%.
  • Adjust the net operating income for next year by any anticipated rent increases. If you are anticipating a 5% increase in rent, and net operating income this year is $50,000, then: $50,000 X 1.05 = $52,500

  • Calculate the expected monetary loss for next year due to vacancy and credit losses: $52,500 (net operating income) x .0450 (4.5%) loss estimate = $2,362.50 in RVCL
  • RVCL is therefore $2,362.50