REIT Break-Even Analysis: $597K Monthly Revenue Floor

Fixed costs ~$59.7K/mo Year 1 base

Contribution margin 100% No variable costs

Break-even revenue ~$59.7K/mo Revenue target

Break-even timing Month 26 Model crossover

Break-even calculator

Use this calculator to test monthly rent against direct property costs and fixed overhead for a REIT.

Lean Base Full

Monthly revenue Use gross monthly rent and operating income here. $ Low rent High rent Variable expenses Use direct costs that rise with rented properties. $ Low costs High costs

Money available to cover fixed costs $31,700 $36,200 revenue - $4,500 variable expenses

Margin ratio

88%

Covers fixed costs

$27,967 short

Fixed monthly costs Use monthly overhead that stays in place. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which REIT expenses stay fixed, and which move with rent collections?

Cost classification

Break-even is only reliable if recurring overhead stays separate from rent-driven expenses. Here, no variable property expenses were provided, so operating break-even is driven mainly by fixed and semi-fixed monthly commitments.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Insurance	Fixed	Include $3,500/month in recurring overhead from Month 1 through Month 60.	Treating insurance as occupancy-driven when the model sets it as a flat monthly charge.
Property Management Software	Fixed	Include $850/month from launch month through Month 60.	Delaying the expense until properties stabilize, even though it starts in Month 1.
Office Rent	Fixed	Include $4,200/month as core overhead, separate from tenant rent collections.	Linking office rent to property revenue instead of treating it as a standing company expense.
Legal and Compliance Fees	Semi-fixed	Start with $2,800/month, then review step-ups as filings and investor work expand.	Modeling compliance as fully variable when it usually changes in chunks.
Marketing and Advertising	Semi-fixed	Use $3,200/month as planned spend, with step changes if leasing volume or investor outreach expands.	Assuming every marketing dollar moves directly with rent collections.
Utilities and Office Supplies	Semi-variable	Include the $950/month base amount, and track usage increases as staffing and office activity grow.	Leaving usage-sensitive office expenses fully fixed during scale-up.
Payroll	Semi-fixed	Use about $41,700/month in the first year, rising to about $92,900/month by Year 4 based on planned full-time equivalent staffing.	Spreading payroll as a sales percentage instead of modeling hiring steps.
Leased Property Obligations	Fixed	Add Cedar Plaza at $4,500/month once active and Elm Residence at $3,800/month once active.	Counting leased property rent as variable just because tenant revenue changes.

How does break-even shift across lean, base, and full REIT scenarios?

Scenario table

Break-even shifts with rent roll and staffing. Revenue rises from $189k in the lean case to $528k in the base and full cases, but fixed costs climb from $642k to $1.19m, so the model stays loss-making.

Planning assumptions only; actual break-even will move with occupancy, lease timing, and staffing mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean three-property case	$189k	$0	$642k	100%	-$453k	Deeply underwater; the monthly gap is about $453k.
Base full-roll case	$528k	$0	$930k	100%	-$402k	Still below break-even; full rent roll does not cover overhead.
Full mature-staff case	$528k	$0	$1.19m	100%	-$664k	Model reaches break-even at Month 26, but EBITDA stays negative through Year 5.

What breaks the break-even plan for this REIT?

Stress test

Cash is tight because Year 1 fixed load already exceeds the current $52,800 monthly rent roll. If lease-up slips or Year 2 staffing lands on time, the gap widens fast, and the zero variable-expense assumption leaves no cushion for repairs or collections.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; Year 1 costs stay in place.	$67,967/month	$15,167 gap	Current rent roll still misses fixed burn.
Revenue shortfall	Lose Willow Square's $11,200 monthly rent.	$67,967/month	$26,367 gap	One vacancy pushes coverage lower fast.
Fixed-cost pressure	Year 2 adds Marketing Manager and Investor Relations Manager.	$82,133/month	$29,333 gap	The headcount ramp lifts the cash hurdle.
Margin pressure	Add the $83,000 monthly leased-property burden.	$150,967/month	$98,167 gap	Leased assets make NOI much thinner.
Combined pressure	Layer the Year 2 hires onto the leased-property burden.	$165,133/month	$112,333 gap	Stacked costs can outrun the rent base.

What should you verify before you buy, lease, and staff this REIT?

Founder checklist

Before you close on property or add headcount, check that the rent roll, burn rate, and cash reserve can still support the Month 26 break-even path. The model shows negative EBITDA in every year, so this is a reserve-first decision.

1Rent Roll$52.8K/mo

Verify the signed rent roll can reach $52.8K per month, because that is the income base the portfolio needs before overhead starts to bite.

2Payroll Ramp$500K to $1.115M

Check that staffing can stay at $500K in Year 1 and only scale to $1.115M by Year 4 if occupancy and collections are on schedule.

3Burn Path$59.7K/mo, Month 26

Test whether the $18K monthly fixed base plus Year 1 wages still leaves a path to modeled break-even in Month 26.

4Asset Close$5.17M + $8.3K/mo

Confirm you can fund the five owned purchases totaling $5.17M and the leased-property cost of $8.3K per month before you sign.

5Preopen Spend$1.314M

Stage the $890K construction budget and the $424K startup capex before major spend, or the cash gap gets harder to close.

6Cash Reserve$6.551M

Hold at least $6.551M of minimum cash through Month 59, since the model stays EBITDA-negative in every year.