Underwrite
Break-even occupancy calculator
Break-even occupancy answers: how full does this unit need to be before you stop losing money on operations (and optionally the loan)? Enter potential gross at 100% occupancy, fixed/variable costs, and debt service; get the occupancy % that zeros cash flow. Useful for STR fantasies and for LTR vacancy stress tests.
Assumptions
Returns stack
- Break-even occupancy
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- Vacancy ceiling
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- Costs to cover
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When to use
Before believing a 90% STR pro forma; checking how much vacancy a leveraged LTR can survive; setting a floor for dynamic pricing seasons.
When not to
Break-even is not your target - you want cushion above zero. And fixed vs variable costs change the answer a lot.
Assumptions: EGI scales with occupancy from 100% gross potential. Cash flow = EGI − OpEx − debt service (if included). Solve for occupancy where cash flow = 0. Permits and HOA bans are outside this math.
Worked examples
Input
Full-occupancy gross $48,000 Fixed costs + debt $30,000
Output
Need ≥62.5% occupancy
Illustrative when OpEx is all fixed - variable costs raise break-even.
Input
Add variable cleaning scaling with nights
Output
Break-even occupancy rises
STR with per-night costs needs higher occupancy to break even.
Common traps
- Fixed vs variable costs change the answer a lot.
- Break-even is not target - you want cushion.
- Permits and HOA bans don't care about your math.