How is "occupancy rate" defined in real estate?

The definition of "occupancy rate" in real estate is the percentage of rental units that are occupied. This metric is crucial for assessing the performance of a rental property, as it reflects the demand for units within that property or community. A higher occupancy rate typically indicates a more desirable location or property, while a lower rate may signify issues such as poor management, property conditions, or market saturation.

In practice, the occupancy rate is calculated by taking the number of occupied units and dividing that by the total number of available rental units, expressed as a percentage. This measure helps landlords and property managers make informed decisions about marketing strategies, pricing, and maintenance needs.

Understanding occupancy rates is essential for real estate investors and property managers, as it directly impacts revenue and profitability. Analyzing trends over time can also provide insight into the broader health of the rental market in a specific area.