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How to use
- Enter Annual operating expenses.
- Enter Annual debt service.
- Enter Potential gross income.
- Calculate, then verify input definitions before comparing properties or periods.
How it is calculated
Break-even occupancy = (operating expenses + debt service) ÷ potential gross income × 100
Example
Expenses 36,000 plus debt service 48,000 on 120,000 potential income require 70% break-even occupancy and 84,000 income.
Important notes
If the result exceeds 100%, potential gross income cannot cover operating expenses and debt service under these assumptions.
Worked examples and interpreting results
| Case | Calculation | Result |
|---|---|---|
| Required income | 36000 + 48000 | 84,000 |
| Break-even occupancy | 84000 ÷ 120000 × 100 | 70 % |
Frequently asked questions
Is break-even occupancy the target occupancy?
Not necessarily. It is the arithmetic coverage threshold; operations usually need a safety margin.
Should inputs cover the same period?
Yes. When comparing income, expense, balance or price figures, keep the period and definitions consistent.
Is the result a final property valuation?
No. The calculator gives a numerical relationship only; real decisions also depend on location, market conditions, taxes, financing and risk.