Break-Even Rent Calculator
Minimum rent · Cash flow buffer · True cost analysis
~1% of value ÷ 12
0 if self-managed
Budget for empty months
HOA, utilities, etc.
Your desired monthly profit
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Break-Even Rent
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Rent for Target CF
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Fixed Monthly Costs
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Total Costs
About This Calculator
The Break-Even Rent Calculator answers a critical question before buying a rental property: what is the minimum rent needed to cover all costs? Knowing your break-even point helps you evaluate whether market rents make a property viable.
Break-even rent must account for more than just your mortgage. True total costs include: mortgage payment, property tax, insurance, maintenance reserve, management fees, vacancy allowance, and any HOA fees. Many first-time landlords underestimate these by 30–40%.
The target cash flow field lets you calculate the rent needed to achieve a specific monthly profit — not just break even. Most investors target $200–$400/month positive cash flow per unit as a minimum investment threshold.
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Frequently Asked Questions
How do I calculate break-even rent?▼
Break-even rent = Total Fixed Costs ÷ (1 - Vacancy Rate - Management Fee Rate). Example: $2,000 fixed costs ÷ (1 - 0.08 - 0.08) = $2,000 ÷ 0.84 = $2,381/month minimum rent. This accounts for income lost to vacancy and management fees.
What if market rents are below my break-even rent?▼
If market rents are below your break-even point, the deal doesn't work at current prices. Options: negotiate a lower purchase price, make improvements to justify higher rent, put a larger down payment to reduce mortgage, find a way to add income (ADU, storage, parking), or pass on the deal.
Should I include mortgage principal in break-even analysis?▼
Yes, include your full mortgage payment (principal + interest). While principal is equity-building (not an expense), it is a cash outflow. Your break-even rent must cover total cash out, not just operating expenses. Some investors exclude principal for NOI analysis but include it for cash flow analysis.
How much positive cash flow should I target?▼
Most experienced investors target minimum $100–$200/unit/month in positive cash flow. $200–$400 is considered solid. Above $500/month is excellent. Negative cash flow properties can still be worthwhile if appreciation is strong, but they require subsidizing from other income.
What is the 1% rule in rental property investing?▼
The 1% rule says monthly rent should be at least 1% of the purchase price. Example: $200,000 property should rent for $2,000/month. This is a quick screening tool, not a guarantee of profitability. It's harder to achieve in high-cost markets but easy in lower-cost markets.
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