Vacancy Rate
The percentage of a rental's potential annual gross income lost to unoccupied periods. DSCR underwriters bake assumed vacancy into their analysis (typically 5–10% on LTR, 25–40% on STR).
Why it matters on a DSCR loan
Even though the standard DSCR formula uses gross rent, vacancy is priced into the ecosystem — STR income projections are haircut steeply in part because occupancy is volatile, and your own hold model should never assume 100% occupancy. Investors underwriting turnover-heavy markets or seasonal STR destinations should stress-test cash flow at pessimistic occupancy before relying on a passing DSCR. Reserves exist largely to carry the payment through exactly these vacant stretches.
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DSCR Calculator Get a QuoteReviewed by Arin Baghermian, Broker Owner — NMLS #1220456 · Last reviewed July 2, 2026 · DSCR Capital Partners is a brand of UTM Financial, LLC (NMLS #2591548).