Break-Even Occupancy Calculator
The occupancy floor a property must clear to cover its operating costs, reserves, and debt — self-managed, and again with a full-service manager (whose fee scales with revenue). If your floor sits above what the market realistically delivers, the deal has no cushion.
Matt NunnFounder, Builders Finance
“Should I buy this?” starts with “how full does it have to be just to break even?” Enter the property’s numbers below. The calculator solves for the occupancy at which cash flow hits zero — first if you run it yourself, then if you hand it to a full-service manager. Compare each against the occupancy the market realistically delivers.
Pairs withDoes This Deal Actually Pencil?
What this assumes
- 365 bookable nights with no closures, minimum-stay losses or blocked owner use.
- Fixed costs do not move with occupancy — that is what puts them in the fixed line. If a cost scales with bookings it belongs in the variable share instead.
- The management fee is charged on lodging revenue and is additional to the variable share, not part of it.
- Break-even means cash flow of zero after debt — not NOI of zero. The floor covers operating costs, reserves and the loan together.
- A floor above 100% is a real answer. It means no amount of occupancy covers the costs, and it is printed rather than hidden.
What the results mean
- Break-even occupancy
- The share of nights you must book to cover operating costs, reserves and debt, with nothing left over. The same floor computed twice: once with you running the property, once with a manager taking a share of revenue. The gap between them is what the fee costs in occupancy — about 20 points on the example, or roughly seventy nights a year.
- Cushion
- The distance in percentage points between the occupancy you expect and the self-managed floor. One point is about four nights a year.
How to read it. Break-even occupancy is the share of nights you must book to cover operating costs, reserve funding, and debt — with nothing left over. A floor three or more points below your expected occupancy is a real cushion; a floor within a point or two either way means the base case already sits at break-even, with no room for a soft season; a floor above it means the deal is underwater at your own forecast. Because a manager’s fee is a share of revenue, hiring one raises the floor substantially — often the difference between a deal that carries itself and one that doesn’t.
The Builders Finance Underwriting Method
- Source it — trace every number to real evidence, not a headline.
- Haircut it — discount for the year you’ll actually have; round revenue down, costs up.
- Record it — value, source, and haircut, in The Assumptions Ledger.
- Stress it — move the numbers that matter to their downside before you trust them.
This is the downside dimension from Does This Deal Actually Pencil? — one of four you’d weigh before buying. The full method is in The STR Deal Underwriting Manual.
Your numbers
Your figures stay in this browser. Nothing you type or calculate here is sent anywhere or saved, and reloading the page returns it to the example. The page itself makes the ordinary requests any page on this site makes — analytics and fonts — and none of them carries your numbers.
The weekly letter for people who run property as a business. One idea a week on the financial side of ownership — what changed, what it means, and what an operator should do about it. Written for short-term and long-term rental owners alike.