Investors should conservatively increase their vacancy estimates when underwriting to account for potentially longer leasing periods in the current economic environment.

“I think in this kind of market, depending on what kind of asset you have and the market you're in, increasing your vacancy numbers and your underwriting is a good idea right now.”

Investors must improve operational efficiency to reduce vacancy costs, as failure to turn units quickly is often the fault of the operator rather than market conditions.

“So, yes, you can budget for a 5% vacancy, but if you're not efficient at turning your unit and getting it rent ready, then your particular vacancy rate is going to be higher. you're going to be vacant longer, it's going to cost you a lot more money.”