Break-Even Occupancy Calculator
The occupancy floor a property must clear to cover its operating costs, capital reserve and debt — with management at the rate you enter, and again before a management allowance. The tool reports exactly how far your expected occupancy sits above or below that floor, in points and in nights.
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 after debt service and the capital reserve reaches zero — first with management at the rate you enter, then before a management allowance. 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 after debt service and the capital reserve of zero — not NOI of zero. The floor covers operating costs, the capital reserve and the loan together.
- A floor above 100% is a real answer: the tool says break-even requires more than full occupancy and shows the calculated floor as supporting detail, in scientific notation from 1,000% up. Where variable costs and management take all of each night’s revenue, there is no break-even occupancy at all, and no floor is shown.
What the results mean
- Break-even occupancy
- The share of nights you must book to cover operating costs, the capital reserve and debt, with nothing left over. The same floor computed twice: with management at the rate you enter — the floor the cushion is measured from — and before a management allowance. The gap between them is what the fee costs in occupancy — 24.0 points on the example, or about 88 nights a year.
- Cushion
- How far the occupancy you expect sits above (+) or below (−) the floor with management at the rate you enter, in percentage points and in the nights those points are worth (points × 3.65). It is reported exactly; there are no bands. It is not shown when break-even requires more than full occupancy or when there is no break-even occupancy.
How to read it. Break-even occupancy is the share of nights you must book to cover operating costs, the capital reserve and debt — with nothing left over. The calculator measures the occupancy you expect against the floor with management at the rate you enter, and reports the gap exactly: in percentage points and in the nights those points are worth (one point is 3.65 nights). There are no bands — half a point is reported as half a point. The floor before a management allowance is shown beside it; the distance between the two is what management costs in occupancy, 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.
A letter for people who run property as a business. One idea at a time 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.