What does a vacancy allowance really cost you?

What a vacancy allowance actually is

A vacancy allowance is a haircut applied to gross rent before everything that depends on rent is calculated. Advertised rent is what a property earns when it is occupied every week of the year; achievable rent is what it earns once you accept that no property is occupied every week of the year, forever. The allowance converts the first figure into the second.

The distinction matters because everything downstream of rent inherits it. Cashflow, the gap between income and outgoings, and ultimately whether a property runs at a profit or a loss are all built on the rent you actually bank, not the rent on the listing. An analysis that skips the vacancy allowance is quietly assuming a perfect tenancy record — an assumption no landlord gets to keep.

Why 3% — and why you can change it

Plintha's default vacancy allowance is 3% of rent, which works out to roughly a week and a half per year. It is a modelling assumption, not a prediction: some properties will do better, some worse, and no default can know which yours will be.

That is why the figure carries the [ASSUMED] tag in every report. Plintha marks the provenance of every number it shows — computed, [ESTIMATE] with the assumption displayed, or [ASSUMED] as an overridable default — so you always know which figures are facts and which are inputs you can challenge. If you have grounds to expect longer or shorter vacancy for a particular property, change the number in Advanced and the whole analysis recalculates around it.

Why the stress test extends vacancy

Every Plintha analysis includes a stress test with three components: interest rates 2% higher, an extended vacancy period, and the interest-only period expiring so repayments flip to principal-and-interest.

The vacancy component is extended deliberately, because the default allowance describes an ordinary year and the stress test asks a different question: does this deal survive a bad one? An empty property means rent stops at exactly the moment repayments continue — and if that coincides with higher rates or an interest-only expiry, the shortfall compounds. The stress test does not predict that a bad year is coming; it tells you whether you could hold the property through one if it did.

Practical ways to keep vacancy down

• —Price to the market. A property advertised above what tenants will pay does not earn a premium — it sits empty while the listing ages. Weeks of zero rent can outweigh whatever the higher asking figure was meant to capture; the arithmetic favours a realistic price and a signed lease.
• —Time the lease. Lease end dates are negotiable at signing. Where you can, steer them towards periods when more tenants in your area are actively looking, and away from stretches when demand is thin — an expiry at the wrong moment can add weeks to a re-let for no other reason than timing.
• —Keep the property in good condition. Well-presented, well-maintained properties photograph better, show better and re-let faster. Responsive maintenance during a tenancy also gives good tenants fewer reasons to leave — and a renewal removes the gap between tenancies entirely.
• —Start marketing before the property is empty. Re-advertising during the notice period, rather than after handover, shrinks the gap between one tenancy and the next.

How vacancy feeds the Plintha verdict

The vacancy allowance reduces expected rent before Plintha builds the rest of the cashflow picture, so it flows through to the 0–100 score and the final verdict — Meets Criteria, Conditional or Below Criteria — under both the Yield and Growth lenses. A deal that only works at 100% occupancy will show it.

The free tier includes one analysis per month with no card required, so you can see how the vacancy allowance, the [ASSUMED] tags and the stress test interact on a real property before committing to anything.

Common questions