Calculate breakeven occupancy for real estate investments and properties
Enter total operating expenses and debt service, then divide by gross potential income to find the occupancy rate needed to break even.
With $400,000 in expenses plus debt service and $600,000 gross potential income, you need 66.7% occupancy to break even.
The minimum occupancy rate needed to cover all operating expenses and debt service. Below this rate, the property loses money.
Most lenders want to see breakeven occupancy below 85%, providing a 15% cushion for market fluctuations or unexpected vacancy.
Standard breakeven uses operating expenses and debt service only. Some analyses include CapEx reserves for a more conservative view.