Break-Even Occupancy Calculator
Find the minimum occupancy to cover all expenses.
What it does
Calculates the occupancy rate required for rental income to cover all operating expenses plus debt service.
Why it matters
Break-even occupancy reveals your margin of safety. If break-even is 85% and the market vacancy is 10%, you're comfortable. If it's 95%, any vacancy will hurt.
How to Use
- 1Enter monthly gross rent: Total rent at full occupancy.
- 2Enter monthly operating expenses: Taxes, insurance, maintenance, management—all recurring costs except mortgage.
- 3Enter monthly debt service: Principal + interest payment.
Break-Even Occupancy Calculator
Break-Even Occupancy75.00%
Maximum Tolerable Vacancy25.00%
Best Practices & Benchmarks
- •Target break-even occupancy below 80%. Above 90% means your margin of safety is very thin — one extended vacancy or large repair can push you into negative cash flow.
- •Compare your break-even to the local market vacancy rate. If your break-even occupancy is 85% and the market runs 10% vacancy (90% occupancy), you're comfortable. If the market runs 15% vacancy, you're at risk.
- •Rising rates increase break-even occupancy on variable-rate, bridge, or refinanced debt — model the impact of a 1–2% rate increase on your break-even.
- •Use break-even as a stress test: can the property cover costs if one unit is vacant for 3 months? If not, your cash reserves need to account for it.
- •Break-even occupancy is particularly important for multifamily; for single-family rentals, the equivalent question is: how many months of vacancy can you sustain before cash flow turns negative?
Related Terms
Want the full picture?
These calculators use your assumptions. Temelios pulls real comps and census data so your vacancy, rent, and expense inputs are grounded in reality.
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