Break-Even Rent Calculator
Work out the minimum rent a property must achieve to cover the mortgage and every running cost, including a realistic allowance for empty periods.
💼 Are you a real estate agent or broker? Send this calculator to your buyers on your own branded listing page — every enquiry comes straight to your WhatsApp. Create free agent page →Before agreeing a rent, it is worth knowing the figure below which the property costs you money every month. This works backwards from the mortgage and running costs to the rent that exactly covers them — including the vacancy allowance, which is what makes the honest break-even higher than most owners assume.
Knowing this number changes negotiations. It tells you when accepting a lower offer to fill a void is still rational, and when it simply locks in a loss for a year.
The formula
Rent must cover fixed costs after both vacancy and the management fee have taken their share. So rent = fixed costs ÷ ((1 − vacancy) × (1 − management)). Dividing rather than adding percentages is what most back-of-envelope estimates get wrong.
Worked example
A mortgage of 950 and 150 of maintenance and insurance gives fixed costs of 1,100. With an 8% vacancy allowance and a 10% management fee, the divisor is 0.92 × 0.90 = 0.828. Break-even rent is 1,100 ÷ 0.828 = about 1,329 a month — nearly 230 above the raw costs.
Using it in a negotiation
If a tenant offers below break-even, the question is whether the shortfall is smaller than another month empty. One empty month at this property costs the full 1,100 of fixed costs, so accepting 80 a month below break-even to fill it immediately is usually the better trade.
Turn a calculation into an enquiry
Buyers who run these numbers are ready to talk. Give every listing its own page with your photo, phone and WhatsApp on it — leads land straight on your phone.
Create your free property pageFrequently asked questions
Why is break-even rent higher than my costs?
Because the management fee is charged on rent collected and vacancy means you do not collect every month. Both take a percentage off the top, so the rent has to be grossed up rather than simply matched to costs.
Should I include mortgage principal?
For a cash break-even, yes — it leaves your account monthly. If you only want to know when the property stops eroding your wealth, use interest alone, since principal is equity you retain.
What if the market rent is below break-even?
Then the property costs you money every month it is let, and the case for holding it rests entirely on capital appreciation. That can be a reasonable bet, but it should be made deliberately and funded from reliable income.