Real Estate Rental Break-Even Analysis: $412K Monthly Rent Needed

Fixed costs $26.1K-$41.2K/mo Base plus payroll

Contribution margin 100% No variable line

Break-even revenue $26.1K-$41.2K/mo Monthly target

Break-even timing Month 32 Cash payback

Break-even calculator

Test whether monthly rent covers direct costs and fixed overhead.

Lean Base Full

Monthly revenue Use monthly rent collected before costs. $ Low rent High rent Variable expenses No separate variable-cost line is given in the source data. $ Low direct costs High direct costs

Money available to cover fixed costs $9,300 $9,300 revenue - $0 variable expenses

Margin ratio

100%

Covers fixed costs

$21,017 short

Fixed monthly costs This is the monthly overhead rent must cover, including staff and operating costs. $ Lean overhead Full overhead

Break-even chart Revenue Total costs

Which rental property expenses stay fixed, and which move with occupancy?

Cost classification

Break-even is only useful if fixed overhead, semi-fixed payroll, and usage-linked items are separated. Fixed operating overhead is $7,150/month before payroll or leased-property rent, so one wrong label can distort the Month 32 break-even view.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Insurance	Fixed	Model at $1,200/month across the planning range.	Don’t tie it to occupancy.
Office Rent	Fixed	Carry $1,800/month as operator overhead.	Don’t exclude back-office overhead from break-even.
Utilities and Internet	Semi-variable	Start with the $400/month base, then add usage if the owner pays tenant-related charges.	Don’t assume tenant usage is always owner-paid.
Marketing and Advertising	Semi-fixed	Use the $800/month baseline, with lease-up campaigns treated as step-ups.	Don’t cut it during lease-up.
Legal and Accounting Services	Semi-fixed	Use $600/month as the base and add spikes for leases and compliance work.	Don’t miss lease and compliance spikes.
Maintenance Supplies	Semi-variable	Use the $500/month base, then layer turnover and repair activity on top.	Don’t treat turnover repairs as zero.
Payroll	Semi-fixed	Step staffing from about $14,083/month early to about $29,167/month mature.	Don’t model headcount as smooth or purely variable.
Leased-property rent	Fixed	Model $4,900/month once all rented units are active.	Don’t offset master rent only when units are occupied.

How does break-even change from the lean opening case to the base ramp case and the full portfolio case?

Scenario table

Fixed costs outrun rent in all three cases, so none of these snapshots reaches break-even yet. With zero variable costs in the source model, the whole gap comes from overhead.

Planning assumptions only; vacancy, repairs, and lease timing can move these figures.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean opening case	$2,400	$0	$21,233	100%	-$18,833	One unit helps, but fixed overhead still wins.
Base ramp case	$9,300	$0	$26,383	100%	-$17,083	More rent cuts the gap, but break-even is still out of reach.
Full portfolio case	$16,500	$0	$41,217	100%	-$24,717	Seven rents still do not cover mature overhead.

What breaks the break-even plan for this rental business?

Stress test

The plan is already $24,717 short at full rent, with $16,500 of monthly revenue against a $41,217 mature fixed burden. Vacancy, rent cuts, repair creep, or higher overhead widen that gap fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$41,217	$24,717 gap	Full rent still leaves a large monthly shortfall.
Revenue shortfall	Monthly rent rolls 10% below plan, to $14,850.	$41,217	$26,367 gap	Vacancy or rent cuts widen the hole fast.
Fixed-cost increase	Fixed burden rises 10% to about $45,338.	$45,338	$28,838 gap	Small overhead increases push break-even higher.
Margin pressure	Maintenance supplies rise from $500 to $1,500 a month.	$42,217	$25,717 gap	Repair creep burns cash before the portfolio scales.
Combined pressure	Revenue falls 10%, fixed burden rises 10%, and maintenance adds $1,000 a month.	$46,338	$31,488 gap	Slow rent-up plus cost creep can push the plan off track.

Can the rent roll cover the monthly burden before you buy, lease, or renovate the next property?

Founder checklist

Test the model against the real rent roll before you commit. If the portfolio cannot cover the monthly property burden first, it is not break-even ready; it needs more occupancy, lower carry cost, or slower hiring.

1Rent roll$16.5K/mo

Verify comps can support the listed full rent roll before you add more properties, because the whole model starts there.

2Property cover73%

Check that occupied units cover the $12,050 monthly property and leased-rent burden, since that is the first break-even test.

3Operator load250%+

Test the same rent roll against mature overhead, because payroll lifts the required occupancy to about 250% and changes the deal math.

4Payroll ramp$29.2K/mo

Stage hiring before payroll reaches about $29,167 per month, or the fixed cost stack will outrun the rent roll.

5Buildout$373K

Fund the $258,000 construction budget plus $115,000 in operating capex before marketing, and write compliance, insurance, maintenance, leasing, and property management steps before signing.

6Cash floor$2.01M

Keep enough cash through Month 59 to survive the $2.01M low point, even if the model shows a later breakeven date.