#322: What "5% Vacancy" Actually Means In Terms of Renewal Rates + Time To Turn Units... Most Investors Never Do This Analysis!

In this solo episode, Axel breaks down one of the most overlooked calculations in multifamily underwriting — what your vacancy rate assumption actually means in practice. Most investors pick a flat vacancy figure (4%, 5%, 6%) without ever connecting it back to the two operational metrics that actually drive it: renewal rate and time to turn and re-lease a unit.

Axel walks through a series of clear, back-of-the-napkin scenarios using a 10-unit building as a baseline, showing exactly how different combinations of renewal rates (40%, 50%, 60%) and turn timelines (3, 4, and 5 weeks) translate into specific annual vacancy figures. The math is accessible, the takeaways are immediately actionable, and the framework applies whether you're buying your first duplex or managing a 100-unit portfolio.

This episode is essential listening for any investor who underwrites deals, manages their own properties, or works with a property manager — and wants to hold their operations to a higher, more data-driven standard.

Join us as we dive into:

• Why most multifamily investors use a vacancy assumption without understanding what operationally drives it
• The two key variables that determine your actual annual vacancy: renewal rate and time to turn and re-lease
• A breakdown of three renewal rate scenarios (60%, 50%, 40%) at a fixed 4-week turn time — and what each translates to in annual occupancy
• A breakdown of three turn-time scenarios (3, 4, and 5 weeks) at a fixed 50% renewal rate — and how each shifts your occupancy figure
• Why that 4% gap between best and worst case is the difference that makes or breaks a deal
• How to arrive at the classic 5% vacancy assumption — and what it tells you about your operations
• Why controlling revenue through renewals and fast lease-up is 80–85% of successful asset management in multifamily
• How unit type (larger bedroom count vs. studios and 1-beds) influences average renewal rates and should inform your underwriting assumptions

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