Introduction: The One Metric That Can Make or Break Your Rental ROI
When most property owners think about rental income, they focus on rent prices, expenses, and maybe maintenance. But there's a silent profit killer that too many overlook — and that’s how much it costs you when your property sits empty.
In this blog, I’ll break down why cost of vacancy is such a crucial metric, how even a small vacancy period can wipe out your annual profits, and what smart investors and property managers do to minimize it.
What Is “Cost of Vacancy”?
Understanding the Hidden Costs
Simply put, the cost of vacancy is the money you lose when your rental sits empty. That includes:
Lost rent (obviously — no one’s paying rent while it’s vacant)
Utility bills, taxes, and insurance that still accrue
Marketing and re-listing costs
Turnover prep like cleaning, repairs, inspections
Time it takes managing the turnover and the work you put into it
Vacancy Rate vs. Cost of Vacancy
These are often confused, but they’re very different:
Vacancy rate tells you how often your rental is vacant.
Cost of vacancy tells you how much that vacancy is actually costing you in dollars.
In other words, vacancy rate is a stat. Cost of vacancy is a financial impact. Not many investors consider the costs that come with vacancy because if it is just sitting empty, there can't be a cost, right? This isn't true because you are missing out on rental income flowing to you each month, which makes a large financial impact.
The 2025 Market Snapshot: Vacancy Is a Real Risk
Nationally, the rental vacancy rate for single family homes hovered around 6.1% in Q2 2025, and in the South (including the Carolinas), it was even higher. That means vacancy isn't just theoretical — it's a very real financial risk, especially if you’re pricing too high or turnover takes too long.
Here in Horry County we've seen a steady increase in the number of available rentals listed on the local MLS. Going back just a few years, it was common to see 40 - 50 available rentals available. Today we consistently see over 300 available rentals on the MLS. This increase in supply has led to rental properties sitting on the market for a longer time.
Real Example: Why Overpricing by $100 Can Cost You $4,500
Let’s break this down with a simple example:
You have a property that should rent for $1,500/month.
You’re thinking of listing it at $1,600/month instead — just $100 higher. Sounds harmless, right?
But here’s the problem: if that extra $100 makes the property sit vacant for even one extra month, you’ve lost $1,500.
If it sits vacant for two months? You’re out $3,000.
Three months? That’s $4,500 in lost income.
Meanwhile, that $100/month increase would only net you $1,200 over a full year.
So by trying to squeeze an extra $100/month, you could easily lose 3x to 4x that amount in vacancy losses. That’s the hidden math too many owners miss.
Vacancy Costs More Than Just Rent
Beyond lost rent, you’re also on the hook for many costs that can't be "turned off":
Utilities that must stay on for showings
Insurance and taxes that don’t pause during vacancy
Listing fees and ad costs to re-market the home
Cleaning, repairs, and maintenance — often required before a new tenant moves in
These hidden costs quietly add up — and they eat into your annual ROI faster than you think.
How Property Managers Reduce the Cost of Vacancy
This is where great property management can actually pay for itself. The two most costly times for a rental are going to be when the property is being leased and when a lease ends. A property manager can pay for themselves if they can speed up the time it takes to lease a property and speed up the time of a turnover when a tenant moves out.
At Beach Rental Group, we help reduce the cost of vacancy by:
Accurate rental pricing based on market data (not guesswork)
Speedy leasing with strong marketing, professional photos, and responsive showings
Efficient turnover process so downtime is minimized
Tenant retention strategies to reduce how often turnover happens in the first place
When we get these things right — and we do — our owners avoid costly vacancies and keep more money in their pockets. I have these conversations all the time with new investors or homeowners who are just looking to rent out their second home for a few years. If you want to learn more about the true costs for your property and how we can help minimize them - schedule a consultation with us HERE.
Smart Strategies to Minimize Vacancy Losses
Price Based on the Market — Not Emotion
We get it: owners want the highest rent possible. But if pricing too high leads to even one extra month of vacancy, it’s not worth it. We always provide a comprehensive pricing analysis, so our clients see what the data supports — not just what we hope to get.
There is really good data that shows the majority, upwards of 70%, of the interest in your property will come within the first 2 - 3 weeks. You want to capitalize on this interest and not overprice the property to scare people away.
Move Fast During Turnover
Time is money. When a tenant moves out, we immediately schedule cleaning, repairs, and inspections so the property is ready to re-list within days — not weeks.
Retain Good Tenants When Possible
Let’s say your tenant doesn’t want to renew if the rent increases by $50. Before you hold firm, ask:
“Will losing this tenant cost me more than $600/year (that $50 x 12)?”
If re-renting means weeks of vacancy, repairs, and marketing — the answer is usually yes. Sometimes, keeping a good tenant at the same rate is the smarter financial move.
Budget for Vacancy in Your Projections
Even the best-managed property will have some vacancy. Build it into your ROI model.
We recommend assuming at least 5% annual vacancy as a buffer when planning cash flow or purchasing new investment properties.
When Property Management Is Worth Every Penny
Many owners ask us, “How can I justify a management fee?”
Here’s the answer: if we can lease your property faster and retain tenants better, we can save you more than our fee in avoided vacancy losses.
Our team has the systems, market knowledge, and urgency to make that happen. We focus on the small things that add up to big savings — and we do it every day.
Conclusion: Vacancy Is a Profit Killer — Unless You Control It
A vacant property isn’t just an empty house. It’s a cash-flow leak, a stress magnet, and a profitability killer.
But with the right pricing, turnover strategy, and professional support, you can drastically reduce the cost of vacancy and protect your bottom line.
Want to see how we do it at Beach Rental Group?
Call me directly at 843-516-4000 or visit us at beachrentalgroup.com. I’d be happy to show you what your property could rent for and how we can help you minimize downtime and maximize profit.
FAQs: The Cost of Vacancy in Long-Term Rentals
What is a good vacancy rate for a long-term rental?
- Ideally, below 5%. Anything above that could indicate pricing or marketing issues.
How long does a unit typically stay vacant?
- Nationwide averages range from 30–60 days, but well-managed properties can re-rent in under 3 weeks. In the Myrtle Beach area, if you rent a property between 20 - 30 days you did a good job pricing it.
Can I avoid vacancy altogether?
- Not entirely, but smart lease timing, tenant retention, and fast turnovers can keep it minimal.
Should I lower my rent to avoid vacancy?
- Not always, but if demand is weak, a modest reduction may save you thousands in lost rent.
Does hiring a property manager reduce vacancy?
- Yes, good property managers should help lease a property quickly and keep turnover time minimal. I would recommend looking at PropertyManagement.com to find the best property managers in your area.
