Updated September 2026
The calculator's default 5% vacancy and 5% maintenance are common starting points, not universal truths — using them uncritically on the wrong property type is one of the more common ways a rental pro forma turns out to be too optimistic. Here's what each percentage actually represents and how to adjust it.
A 5% vacancy allowance is a budgeting shortcut for "on average, this unit sits empty roughly one month out of every twenty" — it's not a claim that vacancy happens evenly or predictably. In practice vacancy is lumpy: a unit might be fully occupied for three straight years and then sit empty for two months during a tenant turnover, averaging out to something in that range over time. The right percentage for a specific property depends heavily on local rental demand, tenant quality and turnover history, and how quickly you can realistically re-lease a vacant unit in that market — a landlord in a tight, high-demand rental market with long-tenured tenants might reasonably budget 3–4%, while a market with high seasonal turnover (college-town rentals, vacation-adjacent markets) or slower-moving demand might warrant 8–10% or more.
The maintenance percentage is meant to cover ordinary repair and upkeep costs — not major capital replacements like a roof or HVAC system (those are better budgeted as a separate reserve, or entered as "upfront repairs" if known and immediate). As a rule of thumb, maintenance costs scale more with the property's age and condition than with its rent level: a newly renovated or newly built property might run comfortably under 5% in its first several years, while an older property (pre-1990 construction, original systems, deferred past maintenance) can reasonably run 8–15% or higher. Property type matters too — a single-family home with a yard and more individual systems (its own HVAC, roof, driveway) typically has different maintenance patterns than a unit in a multifamily building where some of that cost is spread across the HOA fee instead.
Percentage-of-rent maintenance budgeting is convenient but can understate real costs on a low-rent property in an expensive-to-maintain building, since actual repair costs (a water heater, a furnace) don't scale down with rent the way the percentage does. A useful cross-check for an older or larger property: estimate a dollar-per-square-foot annual maintenance reserve instead (rules of thumb in the ballpark of roughly $1–$2 per square foot per year are commonly cited for older housing stock, though this varies significantly by region and building age) and compare that dollar figure to what your percentage-of-rent assumption produces. If the percentage-based number comes in noticeably lower than the per-square-foot estimate, your maintenance line in the calculator is probably too optimistic for that specific property.
The calculator's separate "property management" percentage (default 8%) covers a manager's fee if you use one, and is unrelated to vacancy or maintenance — if you self-manage, that line can reasonably go to 0%, though it's worth still accounting for the value of your own time somewhere in your decision even if not in this specific calculator.
Before finalizing numbers in the calculator, ask three questions: how old is the building and its major systems, how has this unit (or comparable units nearby) historically turned over, and is there any known deferred maintenance that should instead be entered as an upfront repair cost rather than smoothed into an ongoing percentage? Adjusting vacancy and maintenance to reflect the actual property — rather than leaving the defaults in place — is one of the highest-value five minutes you can spend before trusting a cash flow number.
Should vacancy and maintenance percentages be higher for a first-time landlord? It's reasonable to budget more conservatively (higher on both) until you have your own track record with a specific property and tenant pool — you can always revise the estimate downward once you have real operating history.
Does a newer property mean I can set maintenance to 0%? No — even new construction has ordinary wear, appliance service calls, and periodic upkeep. A lower percentage than an older property is reasonable; zero generally isn't realistic over a multi-year hold.
Where do major capital expenses like a new roof fit in? They're better modeled as a one-time cost (the calculator's "upfront repairs" field, or a separate reserve you track outside the tool) rather than folded into an ongoing percentage-of-rent maintenance line, since they're lumpy rather than recurring monthly.
This page is educational only, not investment advice. Actual vacancy and maintenance costs vary by property, market and management — verify assumptions against real operating data where possible.