Loss-to-Lease Burn-Off Calculator
Estimate how quickly a below-market occupied cohort can move toward market rent as leases roll. The schedule separates the scheduled-rent upside from the vacancy and turn costs required to capture it.
Current annual loss to lease$96,000.00
- Current loss-to-lease percentage
- 0.12%
- Months to roll 50% of the cohort
- 1 year
- Months to roll 90% of the cohort
- 1 year 10 months
- Final-year annual loss to lease
- $0.00
- Cumulative gross rent captured
- $685,042.62
- Cumulative rollover costs
- $79,332.54
- Cumulative net income captured
- $605,710.08
Year-by-year burn-off schedule
| Year | Legacy units | Rolled units | Average scheduled rent | Annual loss to lease | Gross rent captured | Rollover costs | Net income captured |
|---|---|---|---|---|---|---|---|
| 1 | 20 | 20 | $1,513.45 | $78,357.67 | $30,454.21 | $39,434.75 | -$8,980.54 |
| 2 | 0 | 40 | $1,665.63 | $29,455.29 | $103,500.95 | $39,897.79 | $63,603.16 |
| 3 | 0 | 40 | $1,778.80 | $0.00 | $157,824.92 | $0.00 | $157,824.92 |
| 4 | 0 | 40 | $1,832.17 | $0.00 | $183,439.67 | $0.00 | $183,439.67 |
| 5 | 0 | 40 | $1,887.13 | $0.00 | $209,822.86 | $0.00 | $209,822.86 |
Rollover units are expected-value estimates and may be fractional until displayed.
Vacancy loss is deducted separately from scheduled rent using 365 days per year.
Rollover is spread evenly through each year from the original cohort and stops once every unit has rolled.
How to use this calculator
- Enter the occupied cohort and its current average contract and market monthly rents.
- Estimate how much of the original cohort rolls each year and the share of market rent achieved at rollover.
- Add annual rent-growth assumptions for unrolled leases and the market benchmark.
- Enter rollover downtime and one-time turn costs, then choose the projection period.
- Review the burn-off timing, cumulative net capture, and the annual schedule together.
How loss-to-lease burn-off is calculated
Loss to lease is the positive difference between market rent and the contract rent paid by occupied units. The current annual amount is 12 × units × max(market rent − in-place rent, 0). If in-place rent is higher than market rent, this is shown as gain to lease instead of a negative loss.
The projection then follows the original occupied cohort month by month. Each month, a fixed share of the original units rolls, limited by the number still on legacy rent. Market and legacy rents grow monthly from the annual assumptions. Rolled units are assigned the selected share of that month’s market rent.
scheduled rent = legacy units × legacy rent + rolled units × capture rate × market rent
The no-rollover baseline keeps every unit on the growing legacy-rent path. Gross rent captured is the difference between projected scheduled rent and that baseline. This means a rollover can produce negative gross capture when the rent you expect to achieve is below the rent the legacy lease would have reached.
net income captured = gross rent captured − vacancy loss − turn costs
Vacancy loss applies only to units rolling in that month. It uses the entered captured rent and converts days to a monthly amount using 365 days per year. Turn costs are the entered per-unit amount multiplied by newly rolled units. Fractional unit counts are intentional: they represent an evenly distributed cohort rather than a dated unit-by-unit rent roll.
What moves the result most
The current rent gap, rollover pace, and achieved rent at renewal or turnover have the largest effect on gross capture. A faster rollover brings the change forward, but it also brings vacancy and make-ready costs forward. Market growth can widen the target rent before a unit rolls; legacy growth can narrow the gap. Capturing less than 100% of market can leave loss to lease even after every original lease has rolled.
What this model leaves out
This is an average-rent planning model, not an appraisal or rent opinion. It does not model exact expiration dates, unit types, concessions, bad debt, ongoing physical vacancy, utilities, operating expenses, capital work, taxes, financing, or sale proceeds. Local rent controls, notice requirements, lease terms, and tenant-protection rules can also limit whether or when a rent change is achievable.
Worked example
Suppose 40 occupied units average $1,450 in-place rent while market rent is $1,650. The current annual loss to lease is 12 × 40 × ($1,650 − $1,450), or $96,000. That is 12.1% of the cohort’s current annual market rent.
If 50% of the original cohort rolls each year, the model moves 1.67 units per month. It reaches 50% rolled in month 12 and 90% rolled in month 22. With full market capture, 3% annual market growth, flat legacy rents, 14 days of downtime, and $1,200 per turn, the schedule shows how much of the scheduled-rent increase remains after the costs of getting those units ready and re-leased.
The figures are cohort averages. For a decision on a specific property, replace the averages with a lease-expiration and unit-type rent roll before relying on the result.
Common questions
What is loss to lease in multifamily real estate?
Loss to lease is the rent not being collected because occupied units have contract rents below supportable market rents. It is usually measured as the positive market-to-contract gap for occupied units. It is different from physical vacancy because the unit is occupied and producing some rent.
How do lease expirations affect loss-to-lease burn-off?
A below-market rent cannot normally be reset until a renewal, turnover, or other permitted lease event. A cohort with more expirations sooner can burn off faster, while a long lease term pushes the potential rent increase later. This calculator spreads that timing evenly; a real rent roll will be uneven.
Why can loss to lease remain after all original leases roll?
It remains when the achieved rent is below the projected market rent. For example, a 95% market-rent capture leaves a 5% gap even after every original lease has rolled. New market growth can also keep moving the benchmark during the rollover period.
Are make-ready costs part of loss to lease?
No. Loss to lease measures the gap between market and contract rent for occupied units. Make-ready, leasing, and vacancy costs are separate turnover costs, but they matter when deciding whether the rent increase creates net income.
What is gain to lease?
Gain to lease occurs when an occupied unit’s contract rent is above current market rent. The calculator labels this separately rather than showing a negative loss-to-lease figure. It does not mean the higher rent can necessarily be maintained at renewal.