Serviced Apartments Break-Even Analysis: About $108K Monthly Revenue

Fixed costs $99K/mo Overhead base

Contribution margin 86.5% After variable spend

Break-even revenue $115K/mo Monthly target

Break-even timing Month 1 Launch month

Break-even calculator

Use this calculator to test monthly revenue, direct expenses, and fixed costs against break-even for a serviced apartment setup.

Lean Base Full

Monthly revenue Revenue sets the margin that has to cover fixed costs. $ Slower start Stronger mix Variable expenses Direct costs like commissions, laundry, and guest supplies move with bookings. $ Lower fees Higher fees

Money available to cover fixed costs $129,500 $150,000 revenue - $20,500 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs These are the monthly overheads the business must cover before profit starts. $ Lean staffing Full staffing

Break-even chart Revenue Total costs

Which serviced apartment expenses stay fixed, and which move with occupancy?

Cost classification

Break-even is only reliable when overhead stays separate from stay-driven spend. In the first operating year, lease and taxes set the floor, while commissions, laundry, supplies, and amenities rise with occupied stays.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Lease ($30,000/month)	Fixed	Include as monthly overhead before any room revenue.	Spreading rent per occupied night and hiding low-occupancy risk.
Property Taxes ($5,000/month)	Fixed	Include as recurring monthly overhead through Month 60.	Leaving taxes out because they do not feel like daily operations.
Utilities Base ($3,000/month)	Semi-fixed	Model the base charge as overhead, then add usage if occupancy data supports it.	Treating all utilities as variable and understating the monthly floor.
Payroll (about $48,000/month in first year)	Semi-fixed	Add staffing in steps as rooms and service levels rise.	Treating payroll as fully variable with each booking.
Booking Channel Commissions (8.0% in first year)	Variable	Apply to booked room revenue when guests come through paid channels.	Applying commissions to every stay, including direct bookings.
Laundry Services (3.0% in first year)	Variable	Tie to occupied stays because linen use follows guest nights.	Putting laundry in fixed overhead and overstating contribution margin.
Housekeeping Supplies (1.5% in first year)	Variable	Apply to occupied-room activity, not available-room capacity.	Budgeting supplies evenly across vacant and occupied rooms.
Guest Amenities (1.0% in first year)	Variable	Link to guest stays because replenishment follows check-ins and usage.	Mixing amenity spend into general overhead and missing stay-level margin.

How does break-even shift from a lean occupancy test to the 40-unit base plan and the 90-unit full build?

Scenario table

The lean case sits near break-even, the base case clears it with a small cushion, and the full case has much more room. Occupancy and ADR do most of the work; fixed costs stay heavy until scale kicks in.

Planning cases only; realized occupancy, ADR, and payroll can move the result.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean occupancy test	$112,440	$15,179	$93,833	86.5%	$3,428	Near break-even; a small occupancy dip would erase profit.
Base 40-unit launch	$154,605	$20,872	$93,833	86.5%	$39,900	Clears break-even, but the cushion is still modest.
Full 90-unit scale	$644,511	$72,775	$121,208	88.7%	$450,528	Strong cushion once occupancy reaches 82% and scale absorbs overhead.

What pushes the break-even plan off track for these serviced apartments?

Stress test

The base plan clears break-even by about $39K/month, but that cushion is thin. Lower occupancy, a higher lease, or more channel fees can wipe it out, and cash already bottoms at -$290K in Month 7.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$108K/month	$39K cushion	Thin cushion, so small demand dips matter.
Revenue shortfall	Year 1 occupancy falls from 55.0% to 38.0%.	$108K/month	$6K gap	Below the break-even occupancy range, rooms stop covering fixed cost.
Fixed-cost pressure	Property lease rises from $30,000 to $35,000 per month.	$114K/month	$34K cushion	A lease reset is one of the fastest ways to squeeze the model.
Margin pressure	Booking channel commissions rise from 8.0% to 10.0% of room revenue.	$111K/month	$37K cushion	Every extra commission point eats contribution margin.
Combined pressure	Occupancy drops to 40.0%, average daily rate slips 5.0%, lease rises to $35,000 per month, utilities to $4,000, and commissions and laundry rise to 10.0% and 5.0%.	$121K/month	$19K gap	This pushes the plan close to the Month 7 cash low.

What should you verify before signing the lease and buying the first furnishings?

Founder checklist

Don’t sign the lease until the 40-unit launch mix, 55% Year 1 occupancy, and $93.7K monthly fixed burn all fit the plan. The model needs about $108.4K in monthly revenue to cover fixed costs, so any miss in demand, pricing, or staffing should delay scaling.

1Launch Mix40 units

Verify the 15 studio, 15 one-bed, 8 two-bed, and 2 penthouse launch mix can open together, because the break-even plan assumes a full 40-unit start.

2Fixed Burn$93.7K/mo

Confirm the lease and overhead can support the monthly fixed load from rent, taxes, utilities, insurance, software, marketing, services, security, and payroll.

3Capex Lock$1.475M

Lock the furnishing and opening budget before spending, because furniture, appliances, systems, linens, bar, spa, meeting room, parking, and signage add up fast.

4Margin Stack86.5% CM

Keep booking commissions, laundry, supplies, and guest amenities near plan so contribution margin, or what you keep after variable costs, stays strong enough to cover fixed burn.

5Housekeeping4.0 FTE

Verify the Year 1 staffing plan can cover 55% occupancy with 3.0 housekeeping staff plus 1.0 head housekeeper, or service slips will hit reviews and repeat stays.

6Cash Cushion-$290K M7

Keep enough reserve to absorb the Month 7 cash low, and pause scaling if occupancy, average daily rate, or staffing falls behind the plan.