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Debt Yield
Equity as Percent of Value
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.

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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

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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

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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

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Total mortgage principal paid down over the actual ownership period.

Debt Service

2

Total annual mortgage payments.

$24,590 Example

Debt Service Coverage Ratio

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

0.84x Example

Loan to Value Ratio

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Loan amount as a percentage of property value.

76.88% Example

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