property calculator

Break-Even Rent Calculator

The rent at which a rental covers itself, solved with vacancy, management, and reserves as percentages.

Break-Even Rent = Fixed Costs ÷ [(1 − Vacancy%) × (1 − Management%) − Reserve%], because vacancy, management, and reserves all scale with the rent. Example: $1,850 of fixed monthly costs with 6% vacancy, 9% management, and 8% reserves needs $2,385.87 of rent to break even, and the property can absorb 48 vacant days a year at a $2,600 market rent.

Quick actions: Save inputs, view saved runs, print, share, or export results

Saved Runs

Inputs

Monthly Principal & Interest$

Monthly Property Tax$

Monthly Insurance$

Monthly HOA Dues$

Other Fixed Monthly Costs$

Vacancy Allowance%

Management Fee%

Maintenance & Capital Reserves%

Target Monthly Cash Flow$

Market Rent for Comparison$

Results

Break-Even Rent

$2,385.87

Fixed Monthly Costs$1,850.00

Net Factor0.7754

Break-Even Rent, Annual$28,630

Rent Needed for Target Cash Flow$2,643.80

Market Rent$2,600.00

Margin Above Break-Even$214.13

Margin Percentage8.98%

Rent Collected at Market Rent$2,444.00

Management Cost$219.96

Reserve Set-Aside$208.00

Cash Flow at Market Rent$166.04

Break-Even Occupancy86.98%

Vacant Days the Property Can Absorb48 days

Tip

The floor below which a rental loses money. Worth knowing before you set an asking rent, not after.

Formula

Break-even rent formulas

Fixed Costs = P&I + Tax + Insurance + HOA + Other

Net Factor = (1 − Vacancy%) × (1 − Management%) − Reserve%
Break-Even Rent = Fixed Costs ÷ Net Factor
Target Rent = (Fixed Costs + Target Cash Flow) ÷ Net Factor

Break-Even Occupancy = (Fixed Costs + Rent × Reserve%)
                        ÷ (Rent × (1 − Management%)) × 100

Vacancy, management, and reserves are all percentages of rent, so they grow with the answer — which means break-even rent cannot be found by adding costs together, only by solving for it. The net factor is the share of each rent dollar that survives to meet the fixed costs, and it is usually far lower than people expect. A property renting at exactly its mortgage payment is not breaking even; it is losing money at a steady rate.

Step by step

How the calculation works

1Enter every cost that does not vary with rent: principal and interest, property tax, insurance, HOA dues, and any fixed service contracts. These continue while the unit sits empty, which is precisely why they set the floor.
2Set the three percentages honestly, because all three tend to be understated. Vacancy below what the market actually experiences, management omitted because you self-manage today, and reserves set from recent repair history rather than the age of the roof and mechanicals all push break-even rent down artificially.
3The net factor tells you how much of each rent dollar reaches the fixed costs. Below about 0.78 you are giving up more than a fifth of gross rent before the mortgage is paid, which is normal and worth seeing explicitly.
4Break-even occupancy is the risk measure. Two properties with identical cash flow can have very different cushions, and the number of vacant days a property can absorb tells you which one survives a slow turnover. Price those days with the [vacancy rate and loss calculator](/calculators/vacancy-rate-loss-calculator).
5Note that raising rent does not raise cash flow dollar for dollar — management and reserves take a share of the increase too. Carry the result into the [property cash flow calculator](/calculators/property-cash-flow-calculator) for the monthly view and the [rental property ROI calculator](/calculators/rental-property-roi-calculator) for total return.

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Property Tool

Property Cash Flow Calculator

The monthly view once the rent clears break-even.

Property Tool

Vacancy Rate & Loss Calculator

Set the vacancy percentage from actual days rather than a rule of thumb.

Property Tool

Property Management Fee Calculator

The effective management rate, once leasing and markup fees are counted.

Property Tool

Rental Property ROI Calculator

A break-even property can still be a reasonable investment. This shows whether it is.

property calculator

Break-Even Rent Calculator

The rent at which a rental covers itself, solved with vacancy, management, and reserves as percentages.

Quick actions: Save inputs, view saved runs, print, share, or export results

Saved Runs

Inputs

Monthly Principal & Interest$

Monthly Property Tax$

Monthly Insurance$

Monthly HOA Dues$

Other Fixed Monthly Costs$

Vacancy Allowance%

Management Fee%

Maintenance & Capital Reserves%

Target Monthly Cash Flow$

Market Rent for Comparison$

Results

Break-Even Rent

$2,385.87

Fixed Monthly Costs$1,850.00

Net Factor0.7754

Break-Even Rent, Annual$28,630

Rent Needed for Target Cash Flow$2,643.80

Market Rent$2,600.00

Margin Above Break-Even$214.13

Margin Percentage8.98%

Rent Collected at Market Rent$2,444.00

Management Cost$219.96

Reserve Set-Aside$208.00

Cash Flow at Market Rent$166.04

Break-Even Occupancy86.98%

Vacant Days the Property Can Absorb48 days

Tip

The floor below which a rental loses money. Worth knowing before you set an asking rent, not after.

Summary

Key output metrics

Break-Even Rent

$2,385.87

$1,850.00 of fixed costs ÷ a net factor of 0.7754

Margin at Market Rent

$214.13

8.98% above break-even, $166.04 of cash flow

Break-Even Occupancy

86.98%

48 vacant days a year the property can absorb

D3 visualization

Where Market Rent Goes

Vacancy, management, and reserves take their share before the fixed costs do. What is left is cash flow.

Guide

How to understand and use this calculator

Quick Answer — How Do You Calculate Break-Even Rent?

Break-even rent is not fixed costs divided by one. Vacancy, management, and maintenance reserves are all percentages of rent, so they grow as the answer grows — which means the equation has to be solved, not guessed.

Fixed Costs = P I + Property Tax + Insurance + HOA + Other fixed monthly costs
Net Factor = (1 − Vacancy%) × (1 − Management%) − Reserve%
Break-Even Rent = Fixed Costs ÷ Net Factor

Worked example: $1,340 of principal and interest, $320 of property tax, $130 of insurance and $60 of other fixed costs is $1,850 a month of fixed cost. With 6% vacancy, 9% management, and 8% set aside for maintenance and capital reserves, the net factor is 0.7754.

Break-even rent is $1,850 ÷ 0.7754 = $2,385.87 a month, or $28,630.38 a year. Note how far that is above the fixed costs: $536 a month of the rent never reaches the mortgage at all, because vacancy, management and reserves take their share first.

At a market rent of $2,600 the property clears break-even by $214.13, a 8.98% margin, producing $166.04 a month of cash flow after all three percentage costs.

How to Use This Calculator: A $2,386 Break-Even

Enter the fixed monthly costs first. Principal and interest, property tax, insurance, HOA dues, and anything else that does not vary with rent — a lawn service, a pest contract, an umbrella policy allocation. These do not shrink when the unit sits empty, which is exactly why they set the floor.

Then set the three percentages, and set them honestly. Vacancy at 6% is roughly 22 days a year; management at 9% is a normal headline rate, though the property management fee calculator usually shows the effective rate is higher once leasing fees are counted; and 8% for maintenance and capital reserves is a conservative-looking figure that in practice is closer to a minimum on an older property. Setting reserves to zero because the roof is currently fine is the most common way a break-even rent gets understated.

The net factor of 0.7754 is the useful intermediate number. It says that only 77.5 cents of each rent dollar is available to cover fixed costs. Everything below that line is why a property renting at exactly its mortgage payment loses money reliably and steadily.

The target rent row solves the same equation for a chosen cash flow rather than zero. To clear $200 a month, the rent needs to be $2,643.80 — and note that it takes $258 of extra rent to produce $200 of extra cash flow, because management and reserves take a cut of the increase too. That ratio is worth remembering before assuming a rent rise translates dollar for dollar, which the rent increase calculator shows from the other direction.

A Second Example: Self-Managed, With HOA Dues

Removing management changes the shape of the answer. Take $980 of principal and interest, $210 of tax, $95 of insurance, $250 of HOA dues, and $25 of other costs — $1,560 fixed — with 5% vacancy, no management fee because you self-manage, and 10% reserves.

The net factor is 0.85 and break-even rent is $1,835.29. At a market rent of $1,900 the margin is only $64.71, or 3.53%, producing $55.00 a month of cash flow. That is a property that works on paper and has essentially no room for error.

The break-even occupancy of 92.11% makes the fragility concrete: the property can afford to sit empty for 28.8 days a year and no more. One slow turnover consumes the entire year's cushion, and a single significant repair consumes more than a year of cash flow. The vacancy rate and loss calculator prices what those empty days actually cost.

The $250 of HOA dues is the item worth interrogating. It is 16% of the fixed cost base and it will rise — dues are not a fixed cost in the long run, only in the short one. The HOA fee impact calculator compounds them properly. And the zero management fee assumes you will always self-manage, which is an assumption about your future time rather than about the property. Add it back at 8% to 10% and break-even rent moves to roughly $2,000 — above the market rent, which is the honest answer to whether this deal works with a manager.

Break-Even Rent, Break-Even Occupancy, and the 1% Screen

Break-even rent answers the pricing question: what must this property earn to stop losing money? It is the right number to know before setting an asking rent, before agreeing a renewal, and before buying — because if the market rent in the area is below your break-even, no amount of good management fixes the deal.

Break-even occupancy answers the risk question: how much can go wrong before the property stops covering itself? At 86.98% in the first example the property can absorb 47 vacant days a year; at 92.11% in the second it can absorb 29. That single number tells you more about the fragility of a rental than the cash flow figure does, because cash flow looks the same whether it comes with a large cushion or none.

Neither is the same as the 1% rule. That screen — monthly rent of at least 1% of purchase price — ignores financing entirely, which means it is useless for comparing a property bought at 25% down against the same property bought at 5% down. Break-even rent uses your actual debt service and is therefore specific to your deal rather than to the building.

A break-even property is not necessarily a bad investment. It still accrues principal repayment every month, may appreciate, and generates depreciation deductions. But it produces no cushion, and a rental with no cushion is a rental where every unexpected repair comes out of your own income. Carry the numbers through the property cash flow calculator for the monthly picture and the rental property ROI calculator for total return before deciding that break-even is enough.

Limitations

This calculator solves a steady-state equation and assumes your percentage inputs are accurate. They usually are not, and they usually err the same way: vacancy set below what the market actually experiences, management omitted because you self-manage today, and reserves set from recent repair history rather than from the age of the roof, the furnace, and the water heater. Under-setting any of the three understates break-even rent, which is the specific failure this page exists to prevent.

It treats maintenance and capital reserves as a percentage of rent, which is a convention rather than a fact. Capital costs track the age and condition of the building, not the rent it commands, and a percentage-based reserve on a low-rent older property will be badly short. Where you have a component-based reserve estimate, convert it to a monthly figure and enter it as a fixed cost instead.

The model is pre-tax and single-period. It excludes depreciation and its tax shelter, the principal portion of the mortgage payment that is building equity rather than disappearing, appreciation, rent growth, expense inflation, and the eventual sale — so a property at break-even is not necessarily an investment at break-even. It also assumes a fixed mortgage payment; on an adjustable loan, break-even rent moves at every reset. This is a general educational tool, not investment advice — verify assumptions against real operating data and consult a qualified professional before committing.

Related Calculators

Set the percentage inputs from real figures rather than habit: the Vacancy Rate Loss Calculator prices vacancy in days rather than a rule of thumb, and the Property Management Fee Calculator shows the effective management rate once leasing fees are included. On a condo, the HOA Fee Impact Calculator compounds dues that are only fixed in the short run. Then carry the result into the Property Cash Flow Calculator for the monthly view and the Rental Property ROI Calculator for total return, and use the Rent Increase Calculator when a renewal needs to close a gap.

Related concepts

Net Factor

The share of each rent dollar left after vacancy, management, and reserves. Break-even rent is fixed costs divided by it.

Break-Even Occupancy

The occupancy needed to cover costs at a given rent. The clearest single measure of how much slack a rental has.

Capital Reserve

Money set aside for roofs, mechanicals, and other replacements. Tracks the building's age, not its rent — which is why a flat percentage can be badly short.

Frequently Asked Questions

How do you calculate break-even rent?+

Divide fixed monthly costs by a net factor that accounts for the percentage costs: Net Factor = (1 − Vacancy%) × (1 − Management%) − Reserve%. With $1,850 of fixed costs, 6% vacancy, 9% management and 8% reserves, the factor is 0.7754 and break-even rent is $2,385.87.

Why is break-even rent higher than the mortgage payment?+

Because vacancy, management, and reserves take their share of rent before the mortgage does. In the worked example, $536 a month of a $2,386 rent never reaches the fixed costs at all. A property renting at exactly its mortgage payment loses money reliably.

What is break-even occupancy?+

The occupancy rate at which a property exactly covers itself at a given rent. At 86.98%, the property can sit empty 47 days a year; at 92.11% it can absorb only 29. It tells you more about a rental's fragility than the cash flow figure does, because equal cash flow can come with very different cushions.

How much should I set aside for maintenance and capital reserves?+

Eight to ten percent of rent is a common planning figure and closer to a minimum on an older property. Capital costs track the building's age rather than its rent, so where you have a component-based estimate — roof, furnace, water heater by remaining life — use that as a fixed monthly figure instead.

Should I include a management fee if I self-manage?+

Yes, unless you are certain you will always self-manage. In the second example, adding management back at 8% to 10% moves break-even rent from $1,835 to roughly $2,000 — above the market rent, which is the honest answer to whether that deal works with a manager rather than with your own unpaid time.

How much extra rent do I need for $200 of cash flow?+

More than $200. Management and reserves take a share of any increase too, so on the worked example it takes $258 of extra rent to produce $200 of extra cash flow — the rent goes from $2,385.87 to $2,643.80.

Is break-even rent the same as the 1% rule?+

No. The 1% screen compares rent to purchase price and ignores financing entirely, so it gives the same answer whether you put 5% or 25% down. Break-even rent uses your actual debt service and is specific to your deal rather than to the building.

Is a property at break-even worth owning?+

It can be. Principal repayment builds equity every month, appreciation may follow, and depreciation shelters income. But it produces no cushion, so every unexpected repair comes from your own income rather than the property's — and one significant repair can consume more than a year of cash flow.

Formula

Break-even rent formulas

Fixed Costs = P&I + Tax + Insurance + HOA + Other

Net Factor = (1 − Vacancy%) × (1 − Management%) − Reserve%
Break-Even Rent = Fixed Costs ÷ Net Factor
Target Rent = (Fixed Costs + Target Cash Flow) ÷ Net Factor

Break-Even Occupancy = (Fixed Costs + Rent × Reserve%)
                        ÷ (Rent × (1 − Management%)) × 100

Step by step

How the calculation works

1Enter every cost that does not vary with rent: principal and interest, property tax, insurance, HOA dues, and any fixed service contracts. These continue while the unit sits empty, which is precisely why they set the floor.
2Set the three percentages honestly, because all three tend to be understated. Vacancy below what the market actually experiences, management omitted because you self-manage today, and reserves set from recent repair history rather than the age of the roof and mechanicals all push break-even rent down artificially.
3The net factor tells you how much of each rent dollar reaches the fixed costs. Below about 0.78 you are giving up more than a fifth of gross rent before the mortgage is paid, which is normal and worth seeing explicitly.
4Break-even occupancy is the risk measure. Two properties with identical cash flow can have very different cushions, and the number of vacant days a property can absorb tells you which one survives a slow turnover. Price those days with the [vacancy rate and loss calculator](/calculators/vacancy-rate-loss-calculator).
5Note that raising rent does not raise cash flow dollar for dollar — management and reserves take a share of the increase too. Carry the result into the [property cash flow calculator](/calculators/property-cash-flow-calculator) for the monthly view and the [rental property ROI calculator](/calculators/rental-property-roi-calculator) for total return.

Related guides

Learn more about this calculation

Guide

Break-Even Rent Calculator

Inputs

Results

Break-even rent formulas

How the calculation works

Learn more about this calculation

Airbnb ROI Guide: How to Calculate Cap Rate, Cash Flow, and Cash-on-Cash Return

How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide

Property Cash Flow Calculator

Vacancy Rate & Loss Calculator

Property Management Fee Calculator

Rental Property ROI Calculator

Key facts

Break-Even Rent Calculator

Inputs

Results

Key output metrics

Where Market Rent Goes

How to understand and use this calculator

Quick Answer — How Do You Calculate Break-Even Rent?

How to Use This Calculator: A $2,386 Break-Even

A Second Example: Self-Managed, With HOA Dues

Break-Even Rent, Break-Even Occupancy, and the 1% Screen

Limitations

Related Calculators

Related concepts

Frequently Asked Questions

Break-even rent formulas

How the calculation works

Learn more about this calculation

Airbnb ROI Guide: How to Calculate Cap Rate, Cash Flow, and Cash-on-Cash Return

How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide

Property Cash Flow Calculator

Vacancy Rate & Loss Calculator

Property Management Fee Calculator

Rental Property ROI Calculator

Key facts

Key output metrics

Where Market Rent Goes

How to understand and use this calculator

Quick Answer — How Do You Calculate Break-Even Rent?

How to Use This Calculator: A $2,386 Break-Even

A Second Example: Self-Managed, With HOA Dues

Break-Even Rent, Break-Even Occupancy, and the 1% Screen

Limitations

Related Calculators

Related concepts

Frequently Asked Questions