The Rental Wire / Planning tools
Rental Property Break-Even Rent Calculator
Find the rent needed to cover your mortgage, expenses and reserves, and how much vacancy you can afford.
What if the achievable rent is different?
The table keeps your dollar expenses and reserves fixed. Only rent, vacancy loss and percentage management fees change.
| Asking rent | Collected | Cash flow |
|---|---|---|
| $1,600 | $1,520 | −$69 |
| $2,000 (entered) | $1,900 | $273 |
| $2,400 | $2,280 | $615 |
How the break-even calculation works
Start with fixed monthly costs: principal and interest, taxes, insurance, HOA fees, routine maintenance, replacement reserves and other owner costs. Divide that total by the share of rent left after vacancy and percentage management fees.
Break-even rent = fixed costs ÷ [(1 − vacancy rate) × (1 − management fee)]
If management is charged on scheduled rent, the denominator is 1 − vacancy rate − management fee. To solve for a cash-flow target, add the target to fixed costs before dividing.
A worked example
Fixed costs of $1,436.62, 5% vacancy and a 10% fee on collected rent leave 85.5 cents of each dollar of scheduled rent. Break-even rent is $1,436.62 ÷ 0.855 = $1,680.26. A $300 monthly cash-flow target requires $2,031.13 rent.
Your market still sets what tenants will pay. A required rent above comparable listings is a signal to reconsider the purchase price, financing or operating plan.
Questions about break-even rent
Does break-even mean this is a good investment?
It means the listed cash costs are covered under your assumptions. It does not measure the return on your upfront cash, appreciation, resale costs or the effect of an expensive surprise. Use the full rental calculator to evaluate returns and equity alongside cash flow.
Why include principal and a replacement reserve?
The full mortgage payment leaves your bank account. Principal also builds equity, which is a separate benefit. A reserve is money you plan to keep available for future work, so this tool deducts it before calling cash spendable.
Is the vacancy buffer a forecast?
No. It is the share of rent you could lose before cash flow reaches zero, averaged over a year with the same costs. Weeks are calculated as vacancy share × 52. Actual vacancies, turnover costs and unpaid rent can arrive unevenly.
Why can there be no break-even rent?
If vacancy and percentage fees consume all rent, raising the rent cannot cover positive fixed costs. A negative vacancy threshold means the property cannot cover its costs even at full occupancy. The tool shows those cases instead of a misleading rent or zero-percent cushion.
How is this different from the full calculator?
This page answers one question: what rent covers these monthly costs? The full calculator adds purchase financing, upfront cash, cash-on-cash return and loan paydown. Plus lets you save properties, compare deals and work through financing, growth and price targets.