Vacancy allowance

Vacancy allowance — the share of gross scheduled rent you assume vanishes to empty months and turnover gaps: 5–10% for ordinary PH long-term rentals, higher in oversupplied districts (the Bay Area and Makati are different planets). It enters the NOI before any metric is computed — a pro-forma at 0% vacancy is marketing, not analysis — and after purchase it becomes a performance target the operator (you) either hits or explains.

First used in: 3.4 · Underwriting: the Gallinelli math