Break-Even Occupancy Calculator

Calculate the minimum occupancy rate needed to cover all expenses. Understanding your break-even point helps you assess risk and determine how much vacancy your property can withstand while remaining profitable.

Income & Expenses
Enter your monthly income and expenses

Monthly Income

Monthly Expenses

Break-Even Analysis
Minimum occupancy required

High Risk

Very tight margins - property may struggle with any vacancy

Break-Even Occupancy

98.44%

Safety Margin

1.56%

Total Income:$3,200
Total Expenses:$3,150
Monthly Cash Flow:+$50

Occupancy Scenarios:

At 100% Occupancy:+$50
At 90% Occupancy:$-270
At 80% Occupancy:$-590
At Break-Even (98.44%):$0

Formula:

Break-Even Occupancy = (Total Expenses ÷ Total Income) × 100

= ($3,150 ÷ $3,200) × 100

= 98.44%

Risk Assessment:

Low Risk:<70%
Moderate Risk:70-85%
High Risk:85-95%
Very High Risk:>95%
Understanding Break-Even Occupancy

Break-even occupancy is the minimum occupancy rate required for a property to cover all operating expenses and debt service without generating a loss. It's a critical metric for assessing the risk profile of a rental property investment.

Why It Matters

  • Risk Assessment: Lower break-even occupancy means more cushion for vacancy
  • Cash Flow Stability: Properties with low break-even rates are more resilient
  • Financing Confidence: Lenders prefer properties with healthy safety margins
  • Market Comparison: Compare your property's risk to market vacancy rates

Interpreting Your Results

Below 70%: Excellent safety margin. Property can withstand significant vacancy and still break even.

70-85%: Good safety margin. Reasonable buffer for typical market vacancy rates.

85-95%: Tight margins. Limited room for vacancy. Consider increasing rents or reducing expenses.

Above 95%: High risk. Any vacancy creates negative cash flow. Reevaluate the investment.

How to Improve Break-Even Occupancy

  • Increase Rents: Raise rents to market rates (if below market)
  • Add Income Streams: Parking fees, laundry, storage, pet fees
  • Reduce Expenses: Shop for better insurance, appeal property taxes
  • Refinance: Lower interest rate reduces mortgage payment
  • Self-Manage: Eliminate property management fees (if feasible)
  • Energy Efficiency: Reduce utility costs through upgrades

Compare to Market Vacancy Rates

Your break-even occupancy should be significantly lower than your market's typical vacancy rate. For example, if your market has a 10% vacancy rate, you want your break-even occupancy below 80% to maintain positive cash flow even during typical market conditions.

Pro Tip: Always factor in a vacancy buffer when analyzing properties. Even if your break-even occupancy is 75%, budget for 85-90% occupancy to account for turnover, maintenance periods, and unexpected vacancies. This conservative approach helps ensure long-term cash flow stability.