Break-Even Occupancy Calculator
Find the occupancy a rental needs to cover its expenses and debt service, and how much cushion you have.
Quick answer
Break-even occupancy is the share of potential rent you must collect to cover costs: (operating expenses + debt service) / gross potential rent. Below that occupancy the property loses money.
Break-Even Occupancy Calculator
Rent if fully let all year.
Excluding loan payments.
Loan principal + interest.
Break-Even Occupancy
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Cushion vs. Current
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Occupancy to Cover Expenses Only
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Collected Rent at Current Occupancy
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Cash Flow at Current Occupancy
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Cash Flow by Occupancy
| Occupancy | Collected rent (₹) | Costs (₹) | Cash flow (₹) |
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Assumptions & method
- Break-even occupancy = (operating expenses + debt service) ÷ gross potential rent, using annual figures.
- Cushion = current occupancy − break-even occupancy, in percentage points. A negative cushion means the property loses money at current occupancy.
- Collected rent = gross potential rent × occupancy. Cash flow = collected rent − operating expenses − debt service.
- Operating expenses and debt service are treated as fixed at every occupancy level, although some costs vary in practice.
- Bad debt, concessions, other income, taxes on income and capital spending are not included unless you reflect them in the inputs.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
How break-even occupancy works
Break-even occupancy measures how close a rental is to losing money. Add the yearly operating expenses to the yearly loan payments, then divide by the rent the property would earn if it were fully let. The answer is the share of that rent you must collect just to cover everything. If the break-even is 75% and the property is 90% occupied, you have a cushion of 15 points before income no longer pays the bills. The chart shows annual cash flow at different occupancy levels, so you can see where it crosses zero, and the table lists the same figures step by step.