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What is an Occupancy Rate?
What is the Occupancy Rate?
The Occupancy Rate represents the percentage of rented or occupied units in a property compared to the total available units. It is calculated as:
Occupancy Rate = (Occupied Units ÷ Total Units) × 100
It is a key performance metric in real estate, indicating property demand and revenue potential.
Key Points:
- Indicator of Property Performance: Higher occupancy means steady rental income.
- Impacts Property Value: A high rate attracts investors and lenders.
- Varies by Market: Economic conditions and location affect rates.
- Target Benchmark: Commercial properties aim for 85-95% occupancy.
Maintaining a strong occupancy rate ensures cash flow stability and long-term profitability.
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