Rental vacancy
A period during which a rental property is unoccupied and generates no income. Banks anticipate this risk by applying a 30% haircut to projected rents in their affordability analysis. For the investor, rental vacancy directly reduces cash flow and net yield. It can be partially covered by rent guarantee insurance (GLI), which sometimes includes a vacancy guarantee.
Key points
- Rental vacancy directly reduces net yield and can push cash flow into negative territory.
- Banks factor in this risk by accepting only 70% of projected rents in their analysis.
- Location in a dynamic area and property quality structurally reduce the risk.
- Some GLI policies include a vacancy guarantee alongside the non-payment cover.
Frequently asked questions
How many months of rental vacancy should be expected on average in France?
Average vacancy duration depends heavily on location and property type. In major cities and high-pressure zones, one to two months every two to three years can be considered reasonable. In less dynamic areas, vacancy can extend to several months. The broker uses local market data to calibrate the cash-flow projections presented to the bank.
What levers help reduce rental vacancy duration?
Pricing the rent slightly below market attracts tenants faster and reduces vacancy. Presenting the property well (professional photos, well-written listing), acting quickly on applications, and using an active property manager also play an important role. For furnished rentals, more frequent turnover is offset by higher rents, but the vacancy risk between tenancies is greater.
Is the vacancy guarantee included in some GLI policies genuinely useful?
It can be, but its activation conditions are often restrictive: a waiting period (typically 3 months after the previous lease ended), a limited cover duration, and obligations to actively seek a new tenant. Its additional cost must be weighed against the monthly rent and actual vacancy risk in the area. In very tight zones, this guarantee is rarely triggered and offers limited value.
In practice
An investor rents out a studio for €600/month. Over one year, they experience 6 weeks of vacancy during a tenant change, equating to approximately €900 in lost rent. This shortfall must be factored into the annual net yield calculation and held as a cash buffer.
Official sources
- Housing and financing information · ANIL
- Mortgage credit (official guide) · Service-Public.gouv.fr