Work out break even occupancy instantly with clear inputs, formula shown and shareable results.
Break-even occupancy is the share of potential rent needed to cover operating expenses and debt service. Lenders watch it closely because it measures how far occupancy can fall before the property cannot pay its own mortgage. Below eighty percent is generally considered comfortable.
Break-even occupancy
Occupancy = (operating expenses + debt service) / gross potential income x 100
Occupancy = (operating expenses + debt service) / gross potential income x 100. Break-even occupancy is the share of potential rent needed to cover operating expenses and debt service.
Above about ninety percent leaves almost no cushion, since normal turnover alone produces five to eight percent vacancy. It signals either too much leverage or an unrealistic rent assumption.
This calculator takes 3 inputs: Annual operating expenses, Annual debt service, Gross potential rental income. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.