seriously consider liquidating that property and re-investing the proceeds in a better property. This is how I look at it anyway. Do you agree or disagree? The experienced landlords in your area will know the average vacancy rates down to the zip code and time of year. Operating Expenses, operating expenses represent the day-to-day costs of managing a rental property business such as Repairs Maintenance, Interest Expense, Professional Fees, Travel Expenses, Property Taxes, Insurance and Administrative Expenses such as a Home Office and Postage. You may find 6 is fine for you. Net Rental Miscellaneous Income I know you already track your monthly rent received. RentFax and RentRange are a couple of pro sites that Ive used myself when determining market rents and vacancy rates. To calculate your Net Rental Income you subtract Vacancies from Gross Rents and adding any Miscellaneous Income. The key to minimizing this cost is to have a process or checklist that you run every time you have a vacancy. Cap Rate Real Estate Investors love to talk Cap Rates (Capitalization Rate). You want to be able to spot any trends in rent reductions. No one wants to say something negative to someone who is giving him or her a gift.