Property Management
What is a vacancy factor in an income property proforma?
AThe number of vacant units
BAn estimated reduction in potential gross income to account for periods of non-occupancy and uncollected rent✓ Correct
CThe percentage of the building that is common area
DThe time between leases
Explanation
A vacancy factor (typically 5-10% for stabilized properties) is subtracted from potential gross income in an income property analysis to estimate effective gross income, accounting for periods when units are vacant or rent is not collected.
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