What is loss to lease?

Loss to lease is a term used in the real estate industry to refer to the potential revenue that a property is unable to generate due to lower-than-market rental rates. This can occur when a property owner or landlord is renting units below market value, resulting in a loss of potential income.

Loss to lease can also occur when a property has a high vacancy rate, as the empty units are not generating any rental income. In these cases, the property is not realizing its full revenue potential.

Property owners and landlords can reduce loss to lease by regularly reviewing and adjusting rental rates to match market conditions, maintaining high occupancy levels, and effectively marketing their properties to attract tenants willing to pay market rates.

By minimizing loss to lease, property owners can maximize their rental income and overall profitability.