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Break-Even Occupancy Rate illustration

Real Estate · Income

Break-Even Occupancy Rate

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Use break-even occupancy to see how much of the rentable space or income base must be filled before the property covers operating costs and debt.

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Stabilized office property

(Operating Expenses + Debt Service) / Gross Potential Income

The property needs 70% of gross potential income to cover annual expenses and debt service.

Check your inputs before you rely on the result — calculations are informational only and depend entirely on the numbers you enter. See our Terms.

Variables and units

  • Operating Expenses

    Annual operating expenses.

    currency

  • Debt Service

    Annual debt service.

    currency

  • Gross Potential Income

    Maximum possible annual income.

    currency

Common mistakes

  • Using collected income instead of gross potential income.
  • Leaving annual debt service out of the numerator.

Step-by-step example

Stabilized office property

The property needs 70% of gross potential income to cover annual expenses and debt service.