What is Break-Even Ratio?
What is Break-Even Ratio?
Section titled “What is Break-Even Ratio?”The Break-Even Ratio (sometimes called Default Ratio) shows what share of your gross rent is already spoken for by running costs and debt:
Break-Even Ratio = (Operating Expenses + Mortgage Payment) / Gross Rent × 100A ratio of 100% means every dollar of rent is consumed by expenses and mortgage payments before you see a cent — the property breaks even exactly. Above 100%, you’re topping it up from other income; below 100%, there’s a cash margin left over.
Where you’ll see it
Section titled “Where you’ll see it”Property → Cashflow tab, in the Net Position card — alongside the property’s actual net cashflow figure for the current year.
Why it matters
Section titled “Why it matters”Break-Even Ratio is a stress-test number, not just a description of today. A property sitting comfortably below 100% still has room to absorb a rent drop, a rate rise, or an unexpected vacancy. A property already at or above 85–90% has very little buffer — a small shock (one bad tenant, one rate rise) can tip it cashflow-negative. Property Insights flags Break-Even Ratio above 85% for exactly this reason.
Because it uses the full mortgage payment (not just interest), Break-Even Ratio is a more conservative, debt-inclusive companion to Operating Expense Ratio, which looks at operating costs alone.