#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 itThe two key variables that determine your actual annual vacancy: renewal rate and time to turn and re-leaseA breakdown of three renewal rate scenarios (60%, 50%, 40%) at a fixed 4-week turn time — and what each translates to in annual occupancyA breakdown of three turn-time scenarios (3, 4, and 5 weeks) at a fixed 50% renewal rate — and how each shifts your occupancy figureWhy that 4% gap between best and worst case is the difference that makes or breaks a dealHow to arrive at the classic 5% vacancy assumption — and what it tells you about your operationsWhy controlling revenue through renewals and fast lease-up is 80–85% of successful asset management in multifamilyHow unit type (larger bedroom count vs. studios and 1-beds) influences average renewal rates and should inform your underwriting assumptionsAre you looking to invest in real estate, but don't want to deal with the hassle of finding great deals, signing on debt, and managing tenants? Aligned Real Estate Partners provides investment opportunities to passive investors looking for the returns, stability, and tax benefits multifamily real estate offers, but without the work - join our investor club to be notified of future investment opportunities.Connect with Axel:Follow him on InstagramConnect with him on LinkedinSubscribe to our YouTube channelLearn more about Aligned Real Estate Partners