Vacancy allowance is a similar to maintenance allowance.  When owning an investment home, you hope that a tenant moves in and never, ever leaves.  But, that is not a realistic view of owning an income property.  The realty is that if you own a property more than a year or two, you will more than likely experience a period when your home is vacant.  That is why we budget for vacancies on our performance sheets.  Just like a maintenance allowance, this figure is just an estimate and this is put in place to budget for future vacancies and help your analysis of the properties more accurate.