Free Break-Even Ratio Calculator
Determine the minimum occupancy required for a rental property to cover all operating expenses and debt service.
USD
USD
USD
Break-Even Ratio
80.0%
Total Annual Costs$48,000
Income Cushion at Full Occupancy$12,000
Break-Even Ratio vs Annual Operating Expenses
Break-Even Ratio
The break-even ratio tells you what percentage of potential gross income is needed to cover all property costs.
Formula
BER = (Operating Expenses + Debt Service) / Gross Potential Income x 100
Interpretation
Example Calculation
A property has $20,000 operating expenses, $28,000 debt service, and $60,000 gross potential income.
- 01Total costs: $20,000 + $28,000 = $48,000
- 02Break-even ratio: $48,000 / $60,000 x 100 = 80.0%
- 03Income cushion at full occupancy: $60,000 - $48,000 = $12,000
- 04The property needs at least 80% occupancy to cover all costs