Break-Even Occupancy Calculator
Break-even occupancy is the share of possible income a rental property must bring in to cover its costs. Below that share, the rent does not pay all the bills.
- Free
- Works offline after your first visit
- Saves on this device
- No sign-up
- Updated
How it works
Add the yearly operating costs to the yearly loan payments. Divide that total by the income the property would earn if every unit were rented all year, then multiply by 100.
Operating costs are the regular running costs, such as repairs, insurance and utilities. Loan payments are the full yearly amount paid to the lender, principal and interest together.
Worked example
A property with $84,000.00 of yearly costs, $60,000.00 of loan payments and $180,000.00 of full income needs 80% of its income to break even.
Questions
Does a lower number always mean a better property?
Not on its own. It shows the cushion between costs and income. Vacancy, repairs and rent changes all affect the real result.
Are vacancies included?
Only through the full-income figure you enter. Enter income after expected vacancy to see the break-even on that basis.
Is this tax advice?
No. It shows the arithmetic only. A tax professional can look at deductions and depreciation for your own situation.
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