Skip to main content
Equity From Paydown
Front End Ratio
Intermediate Debt Metrics Loan & Mortgage Risk Assessment

Breakeven Ratio

Percentage of gross rent needed to cover all expenses and debt service.

Example Result

Sample Data
106.76%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

See Your Own Properties

With the Rental Property Calculator, you can run this calculation against your own rental properties using your real numbers.

View Pricing Sign In

40-Year Projection Chart

Subscribe to explore how breakeven ratio evolves over a 480-month holding period.

View Pricing

Breakeven Ratio Formula

(Operating Expenses + Debt Service) / Gross Potential Rent x 100
($11,924 + $24,590) / $34,200 x 100
106.76%

What This Means

A sample property priced at $385,000 with $2,850/month rent has a breakeven ratio of 106.76% at Purchase (Month 0). This metric directly shows your risk tolerance. A 90% breakeven ratio means even a small vacancy increase pushes you into negative cash flow. Lenders typically want to see breakeven ratios below 85%.

Where This Value Comes From

Breakeven Ratio is not entered directly — it is calculated from Total Operating Expenses, Debt Service, and Gross Potential Rent. See the formula breakdown above and the detailed inputs below.

Inputs That Determine Breakeven Ratio

Platform Distribution

Unlock Platform Benchmarks

See the average, median, and where your property ranks among other investors on the platform.

Unlock Rental Property Calculator

Why It Matters

This metric directly shows your risk tolerance. A 90% breakeven ratio means even a small vacancy increase pushes you into negative cash flow. Lenders typically want to see breakeven ratios below 85%.

Detailed Explanation

The Breakeven Ratio shows what percentage of gross potential rent is consumed by operating expenses and debt service combined. A ratio of 85% means you need 85% occupancy just to cover costs.

Example

Sample Result
83.68%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

Related Calculations

Extra Principal Payment

U

Additional principal payment made each month beyond the required mortgage payment to accelerate loan

Remaining Mortgage Balance

U

Current remaining principal balance on the mortgage based on the actual number of months since purch

$304,871 Example

Cumulative Principal Paydown

U

Total mortgage principal paid down over the actual ownership period.

Debt Service

2

Total annual mortgage payments.

$24,590 Example

Debt Service Coverage Ratio

2

Net Operating Income divided by annual debt service — measures ability to cover mortgage.

0.84x Example

Loan to Value Ratio

U

Loan amount as a percentage of property value.

76.88% Example

Run This Calculation on Your Property

Get instant results for all 207 calculations by entering your property details into the Rental Property Calculator.

View Pricing