If you want to know the value of a property, if you want to know whether it's competitive in your marketplace, then one important index to consider is its vacancy factor. When looking at apartments many appraisers automatically assume a 5 percent vacancy factor, a percentage which changes with local supply and demand. If there's overbuilding then occupancy rates go down and it becomes difficult to raise monthly rentals. If the local population expands faster than the number of units required to provide housing, then there's more competition for units, the occupancy rate goes up, and higher rents become possible.
Most local markets have vacancy rates which change over time.
Over the last 10 years in the Portland marketplace, as an example, we have seen vacancy rates rise and fall. To keep vacancy levels low, our property managers watch turnover rates with great care. Every week they compare our rates to the market, set a goal to beat the rate, and also try to re-let properties as quickly as possible. With properties that have on-site managers, properties can usually be ready for a new tenant in a week after the last tenant has moved out. Houses take a little longer.