Break-Even Ratio Calculator
Use this free Break-Even Ratio calculator to make better property management decisions. Enter your values below to get instant results.
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How to Use This Calculator
- 1 Enter operating expenses
- 2 Enter annual debt service
- 3 Enter gross potential income
- 4 Calculate break-even ratio
- 5 Compare to <85% benchmark
Example Calculation
Evaluating multifamily risk
Inputs:
- Expenses: $40K
- Debt: $36K
- Income: $100K
Result:
Break-even = 76%. Can sustain 24% vacancy.
Important Considerations
- • Interest-only loans improve ratio temporarily
- • Value-add properties may start high
- • Seasonal properties need different analysis
Frequently Asked Questions
Below 85% is healthy. 70-80% provides cushion. Above 90% is risky. Lenders often require <85%.
Shows maximum sustainable vacancy. 80% ratio = can handle 20% vacancy before negative cash flow.
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