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Annual Rental Income

Real EstateRent and Tenancy
Annual rental income —
Gross potential rent (full occupancy)
—
Vacancy loss
—
Other income per year
—
Average per month
—
Where the full-occupancy year goes
The chart appears with your result

Annual rental income is monthly rent × number of units × 12, minus an allowance for vacant or unpaid months, plus any other monthly income such as parking. Four units at $1,200 with 5% vacancy and $100 a month of parking come to $57,600 − $2,880 + $1,200 = $55,920 a year.

About this tool

Landlords sizing up a purchase, owners preparing a budget and tenants-turned-investors comparing listings all start from the same figure: how much rent the property actually collects in a year. Enter the rent for one unit, how many identical units there are, a vacancy percentage and any recurring side income, and the tool returns the full-occupancy potential, the amount lost to empty or unpaid months, the extra income and the effective yearly total, with the working shown line by line. A donut chart splits the potential year into rent collected, other income and vacancy loss, and can be saved as PNG, SVG or CSV. One limit: it assumes every unit rents for the same amount; for mixed rents, run each rent level separately and add the totals.

How to use it

  1. Enter the rent per unit

    Type the monthly rent charged for one unit, in dollars.

  2. Set the unit count

    Use the − and + buttons to match the number of units at that rent.

  3. Drag the vacancy slider

    Choose the share of the year you expect units to sit empty or unpaid; 5% is about 18 days a year.

  4. Add other monthly income

    Include parking, laundry, storage or pet fees paid each month, then read the yearly total and the breakdown.

Examples

$1,500 a month, let all year

Rent per unit, per month
1500
Number of units
1
Vacancy and unpaid rent
0
Other income per month (parking, laundry, fees)
0

Result Annual rental income: $18,000.00
Gross potential rent (full occupancy): $18,000.00
Vacancy loss: $0.00
Other income per year: $0.00
Average per month: $1,500.00

  1. Gross potential rent = $1,500.00 × 1 unit(s) × 12 = $18,000.00
  2. Vacancy loss = $18,000.00 × 0% = $0.00
  3. Other income = $0.00 × 12 = $0.00
  4. Annual rental income = $18,000.00 − $0.00 + $0.00 = $18,000.00

A single unit let at $1,500 with no empty months brings in $18,000 of gross rent for the year.

Fourplex at $1,200, 5% vacancy

Rent per unit, per month
1200
Number of units
4
Vacancy and unpaid rent
5
Other income per month (parking, laundry, fees)
100

Result Annual rental income: $55,920.00
Gross potential rent (full occupancy): $57,600.00
Vacancy loss: $2,880.00
Other income per year: $1,200.00
Average per month: $4,660.00

  1. Gross potential rent = $1,200.00 × 4 unit(s) × 12 = $57,600.00
  2. Vacancy loss = $57,600.00 × 5% = $2,880.00
  3. Other income = $100.00 × 12 = $1,200.00
  4. Annual rental income = $57,600.00 − $2,880.00 + $1,200.00 = $55,920.00

Four units give $57,600 of potential rent; 5% vacancy removes $2,880 and $100 a month of parking adds $1,200, leaving $55,920.

Duplex at $2,000, 8.5% vacancy

Rent per unit, per month
2000
Number of units
2
Vacancy and unpaid rent
8.5
Other income per month (parking, laundry, fees)
0

Result Annual rental income: $43,920.00
Gross potential rent (full occupancy): $48,000.00
Vacancy loss: $4,080.00
Other income per year: $0.00
Average per month: $3,660.00

  1. Gross potential rent = $2,000.00 × 2 unit(s) × 12 = $48,000.00
  2. Vacancy loss = $48,000.00 × 8.5% = $4,080.00
  3. Other income = $0.00 × 12 = $0.00
  4. Annual rental income = $48,000.00 − $4,080.00 + $0.00 = $43,920.00

An 8.5% allowance is roughly one empty month per unit each year, which costs this duplex $4,080.

How it is calculated

Annual income = R × U × 12 × (1 − V ÷ 100) + O × 12

R
Monthly rent for one unit
U
Number of units at that rent
V
Vacancy and collection loss, as a percentage
O
Other income received per month

Gross potential rent is what the property would bring in if every unit were let and paid for twelve months. Real properties lose some of that to turnover gaps and arrears, so the vacancy percentage is taken off the rent only, not off side income. Other monthly income is annualised and added back. The result is often called effective gross income; operating expenses are not deducted, so it is a top-line figure rather than profit.

Sources

When not to use it

  • Do not treat the result as profit, because taxes, insurance, repairs and management are not deducted.
  • Units with different rents need separate runs that you add together.
  • Short-term holiday lets with nightly pricing fit an occupancy-rate model better.

Common mistakes

  • Leaving vacancy at 0% for a property that turns over tenants every year.
  • Counting a refundable security deposit as income.
  • Entering the rent for the whole building in the per-unit box and then also setting several units.

Frequently asked questions

What vacancy rate is reasonable to assume?

Many investors use 5% to 8% for long-term residential lets, which equals roughly 18 to 29 empty days per unit each year. Look at how long similar listings near you stay on the market and how often your tenants move, then set the slider to match. A newly built or student property may need a higher figure.

Is annual rental income the same as net operating income?

No. This figure is effective gross income: rent after vacancy plus side income. Net operating income subtracts operating costs such as property tax, insurance, maintenance, utilities you pay and management fees. Financing costs are excluded from both.

Do security deposits count as rental income?

Under IRS Publication 527, a deposit you plan to return at the end of the lease is not rental income. It becomes income only if you keep it, for example because the tenant broke the lease or left damage, or if it is really the final month's rent paid in advance.

What counts as other income?

Any recurring payment tied to the property beyond base rent: parking spaces, coin laundry, storage lockers, pet rent, or fees a tenant pays for services. Enter the monthly amount; the tool multiplies it by 12 and does not apply the vacancy percentage to it.

How do I handle units that rent for different amounts?

Run the calculation once for each rent level with its own unit count, then add the annual totals. Alternatively enter the average rent across all units with the total unit count, which gives the same gross potential rent.

Why does the monthly average differ from the rent I charge?

The average per month is the effective yearly total divided by 12, so it already reflects the vacancy allowance and includes side income. For a single unit at $1,500 with 5% vacancy and no extras it is $1,425, not $1,500.