Vacancy between tenants is the period between the end of one paid lease and the beginning of the next paid tenancy. During this gap, the property continues to generate ownership costs while rental income stops.
A common calculation multiplies the monthly rent by twelve and treats the result as annual income. This figure represents potential revenue under a perfect occupancy scenario. The actual result depends on vacant days, preparation time, tenant placement costs and ongoing property expenses.
What counts as vacancy between tenants?
The vacancy period begins on the first day after the previous paid lease ends. It finishes on the day before the next paid tenancy starts.
The period may include:
- the gap between the previous move-out and property inspection;
- cleaning and laundry;
- furniture, appliance and finishing checks;
- repairs and replacement of damaged items;
- new photography and advertising;
- property viewings;
- the waiting period before the agreed move-in date.
Owner stays should be recorded separately. They reduce the number of days available for rent, although they do not represent market-driven vacancy. A useful report separates vacant days, owner use and maintenance closures.
How to calculate vacant days
The basic formula is:
Vacant days = new paid lease start date − previous lease end date − 1 day
Suppose the previous lease ended on 31 May and the new tenant began paying rent on 19 June. The property was vacant from 1 to 18 June, giving a total of 18 vacant days.
The lost rental income can be calculated through a daily rate:
Daily rental rate = monthly rent ÷ number of days in the calculation month
Lost rent = daily rental rate × vacant days
With monthly rent of THB 45,000 in June, the daily rate is THB 1,500. An 18-day vacancy therefore reduces rental revenue by THB 27,000.
For annual analysis, calculate the vacancy rate:
Vacancy rate = vacant days ÷ available rental days × 100%
The expected vacancy period and turnover cost depend on the property format. Investors can compare condos for sale in Thailand with villas and private homes in Thailand, as each segment attracts different tenants and carries different maintenance requirements.
What is included in the full cost of tenant turnover?
Lost rent is only one part of the financial impact. The full cost of tenant turnover includes every expense required to inspect, prepare, advertise and lease the property again.
- Cleaning: deep cleaning, laundry, curtains, upholstery, kitchen and bathroom treatment.
- Minor repairs: wall painting, hardware replacement, moisture treatment, furniture and appliance repairs.
- Replacement items: linen, towels, kitchenware, light bulbs and household supplies.
- Advertising: updated photographs, listing fees and paid promotion.
- Tenant placement: agent commission or a placement fee charged by the management company.
- Ongoing ownership costs: common area fees, internet, pool care, garden maintenance and minimum utility use.
- Handover administration: contract preparation, inventory records, meter readings and key transfer.
Our guide to rental property expenses in Thailand explains the wider cost structure. These expenses should appear as separate lines in the financial model because their timing and purpose differ.
The working formula is:
Tenant turnover cost = lost rent + property preparation + tenant placement + ongoing costs during the vacant period
How vacancy changes occupancy and annual income
Occupancy measures the share of available days that generated paid rent:
Occupancy rate = paid rental days ÷ available rental days × 100%
Vacancy uses the same calculation base:
Vacancy rate = vacant days ÷ available rental days × 100%
When both metrics use the same available-day definition, occupancy and vacancy add up to 100%. Owner stays and scheduled maintenance should be shown separately to keep the operating figures meaningful.
Potential annual revenue assumes a perfect twelve-month calendar:
Potential annual revenue = monthly rent × 12
Actual income requires several deductions:
Actual annual income = potential revenue − lost rent − tenant turnover costs − annual ownership and management expenses
The length of each vacant period depends heavily on advertising, pricing, repairs, tenant screening and management response times. The broader operating process is covered in our guide to rental and property management in Thailand.
A high occupancy rate also requires context. A property may achieve strong occupancy through excessive discounts. Owners should review the average achieved rental rate and the final amount retained after expenses alongside occupied days.
Example of rental yield after vacancy
Consider a condo with a total invested cost of THB 6,800,000 and monthly rent of THB 45,000. One tenant turnover during the year creates an 18-day vacancy period.
| Item | Amount |
|---|---|
| Potential rent for 12 months | THB 540,000 |
| Lost rent for 18 vacant days | THB 27,000 |
| Deep cleaning | THB 3,500 |
| Minor repairs and replacement items | THB 8,000 |
| Advertising and tenant placement | THB 22,500 |
| Ongoing costs during the vacant period | THB 4,500 |
| Other annual ownership and management expenses | THB 96,000 |
| Net annual income | THB 378,500 |
The gross calculation before expenses gives:
THB 540,000 ÷ THB 6,800,000 × 100% = 7.94%
After vacancy and all listed expenses, the result becomes:
THB 378,500 ÷ THB 6,800,000 × 100% = 5.57%
One tenant change has reduced the calculated return by approximately 2.4 percentage points. A second turnover within the same year would widen the gap further.
Property comparisons should use the same calculation base: total invested capital, realistic achieved rent, expected vacant days and a consistent list of operating expenses.
Long-term and short-term rental vacancy
In long-term rentals, vacancy usually appears as one continuous period between two leases. The main risks are a slow tenant search, repairs after move-out and a delayed move-in date.
Short-term rentals distribute vacant nights throughout the calendar. The calculation should include:
- total nights available for rent;
- paid occupied nights;
- average achieved nightly rate;
- booking platform commissions;
- cleaning and check-in costs;
- maintenance closure days;
- seasonal changes in demand.
A vacant night during peak season usually carries a higher opportunity cost than a free date during a weaker month. Monthly analysis therefore provides a clearer picture than a single annual occupancy figure.
The property rules, management agreement and local requirements for the chosen rental model should be reviewed before purchase. These conditions can affect the available rental calendar and the owner’s operating costs.
How to reduce vacancy without damaging the rental rate
Vacancy management should begin before the current lease expires. The owner or management company needs a clear timetable for renewal discussions, inspection, repairs, advertising and the next handover.
- Confirm the tenant’s plans early. Request a renewal decision 30–45 days before the lease ends.
- Inspect the property in advance. A preliminary repair list allows materials and contractors to be arranged early.
- Prepare current photographs. Advertising can begin before move-out when viewing access has been agreed.
- Compare the asking rent with similar properties. Use listings with a comparable area, size, condition and rental format.
- Set repair deadlines. Every task should have a responsible person, budget and completion date.
- Record the reason for every vacant period. Useful categories include seasonality, pricing, repairs, cancellation and weak demand.
- Maintain a vacancy reserve. The reserve should cover lost rent, preparation and tenant placement without forcing an immediate price reduction.
A practical financial plan uses optimistic, base and cautious scenarios. The base case should reflect the property’s operating history or comparable rentals. The cautious case should allow for a longer tenant search and a larger repair budget.
Rental yield is ultimately determined by the money retained after vacant periods and operating costs. A detailed calendar and expense record reduces the gap between advertised returns and the owner’s actual financial result.
