Break-Even Calculator
Calculate the minimum rent needed to break even on your rental property. Determine the rent required to cover expenses and achieve your target ROI.
Mortgage, taxes, insurance, maintenance, etc.
Desired annual return on investment
Current market value or purchase price
How the Break-Even Calculator Works
Enter Monthly Expenses
Input all your monthly property expenses including mortgage, taxes, and maintenance.
Set Target ROI
Choose your desired annual return on investment percentage.
Get Break-Even Rent
See the minimum rent needed to cover expenses and achieve your ROI target.
Understanding Break-Even Analysis
What is Break-Even Rent?
Break-even rent is the minimum amount you need to charge to cover all your expenses. It's the point where your rental income equals your total costs.
Break-Even Formula:
Break-Even Rent = Monthly Expenses + (Monthly ROI Target)
Why Break-Even Analysis Matters
Helps determine if a property is a good investment
Guides you in setting appropriate rental rates
Shows how much buffer you have above expenses
Compare break-even with market rental rates
Frequently Asked Questions
What expenses should I include?
Include all monthly expenses: mortgage payment, property taxes, insurance, maintenance, property management fees, HOA fees, utilities (if paid by landlord), and any other regular costs.
What if my break-even rent is higher than market rates?
If your break-even rent exceeds market rates, you may need to reconsider the investment, look for ways to reduce expenses, or adjust your ROI expectations. This could indicate the property is overpriced or the market doesn't support the required rent.
Should I include vacancy in my calculations?
Yes, it's wise to factor in some vacancy. Consider adding 5-10% to your break-even rent to account for occasional vacancies and tenant turnover. This provides a safety buffer.
How do I use break-even analysis for multiple properties?
Calculate break-even for each property individually. Properties with lower break-even rents relative to market rates are generally better investments. This helps you prioritize which properties to acquire or improve.
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