Lease-up calculator
The lease-up period is the time between a property opening for leasing and reaching stabilized occupancy. This calculator estimates how long that takes at your leasing pace, the rent the empty units forgo on the way, and the cash it takes to carry the property until the rent catches up with the bills.
How long
When the rent covers the costs
Month by month
Scroll the table sideways to see every column.
| Month | Leased at start | Rent collected | Costs | Cash flow | Running total |
|---|---|---|---|---|---|
| 1 | 18 | $32,400 | $190,000 | −$157,600 | −$157,600 |
| 2 | 30 | $54,000 | $190,000 | −$136,000 | −$293,600 |
| 3 | 42 | $75,600 | $190,000 | −$114,400 | −$408,000 |
| 4 | 54 | $97,200 | $190,000 | −$92,800 | −$500,800 |
| 5 | 66 | $118,800 | $190,000 | −$71,200 | −$572,000 |
| 6 | 78 | $140,400 | $190,000 | −$49,600 | −$621,600 |
| 7 | 90 | $162,000 | $190,000 | −$28,000 | −$649,600 |
| 8 | 102 | $183,600 | $190,000 | −$6,400 | −$656,000 |
What the lease-up costs
What counts as stabilized
Stabilized occupancy is the level a property is expected to hold once the lease-up is over and new leases are simply keeping pace with move-outs. The figure is set deal by deal, in a loan agreement, an appraisal or a business plan, so the calculator takes yours rather than supplying one. If your lender counts a property as stabilized only after it has held the target for some months, add those months to the result.
How the months are counted
The target is rounded up to a whole unit, because a fraction of an apartment cannot be leased: at 95.0%, a 50-unit building needs 47.5 units, so reaching the target takes 48. The units still to lease are divided by your monthly pace, net of move-outs, and rounded up to a whole month. The pace is a straight line. Real leasing is seldom that even and can slow as a building fills, so read the answer as an average.
What the lease-up costs
Two figures, answering different questions. Rent short of stabilized is the income the empty units forgo compared with the property at its target. Cash to carry it is the deepest the running total of monthly cash flow goes before the rent catches up with the operating costs and the loan payment: the cash you need on hand, from reserves or the loan, to get through. On the example the first is $777,600 and the second $656,000.
A unit leased during a month is counted as paying from the next month. That is conservative, since a lease signed mid-month pays for part of it, and it makes every figure checkable by hand.
When the target does not cover the costs
If the rent at your target occupancy is still less than the monthly costs, the property keeps losing money after the lease-up ends. The calculator says so rather than presenting the carry figure as the whole cost, and shows the occupancy at which the rent would cover the costs.
What this leaves out
Concessions, such as free months offered to sign a lease, which reduce the rent collected. Costs that rise as units fill, like utilities, turnover and leasing commissions: operating costs here are one monthly figure. And seasonality, which a straight-line pace ignores.