In real estate, occupancy describes who is living in or using a property and how the space is being used. It applies to homeowners, renters, businesses and special-purpose facilities. When people ask, "What does 'Occupancy' mean in real estate?" they’re referring to legal possession or physical use of a property and related metrics that measure usage and income.
Listings commonly note occupancy status so buyers and renters know if a property is vacant, owner-occupied, or tenant-occupied. A "tenant-occupied" label signals showings may be restricted and the possession date could be delayed.
Managers track occupancy rate to evaluate performance. Example: an apartment complex with 100 units and 90 occupied units has a 90% occupancy rate. Low rates often trigger marketing, rent adjustments, or renovations.
Investors use both occupancy rate and economic occupancy. A building might have a 95% occupancy rate but only 85% economic occupancy if many units are leased below market—an indicator to raise rents or replace leases.
Local codes set occupancy standards (e.g., maximum persons per bedroom) and require inspections to ensure safe, code-compliant use. Illegal occupancy can lead to eviction proceedings or fines.
High occupancy supports higher pricing—hotels and multifamily properties with consistently strong occupancy can command premium rates. Low occupancy often prompts promotions, concessions, or property upgrades.
Occupied properties require ongoing upkeep. Conversely, vacant units are more vulnerable to vandalism or deferred maintenance; owners often renovate vacant units to improve appeal and raise rents.
Occupancy is a core real estate concept that affects listings, management, investment returns, legal compliance and day-to-day operations. Understanding whether a property is owner-occupied, tenant-occupied, or vacant—and tracking occupancy and economic occupancy—gives buyers, renters and investors practical insight into value, timing and risk.
