What is Breakeven Occupancy?

What is Breakeven Occupancy?

Breakeven occupancy refers to the minimum occupancy rate that a hotel, apartment complex, or other rental property must achieve in order to cover its operating expenses, without making a profit or a loss. It's an important financial metric for property management, indicating the point at which the revenue from rented units equals the total operating costs of the property, including fixed and variable expenses.

Calculating the breakeven occupancy rate helps property owners and managers understand how full the property needs to be to sustain itself financially. This calculation is especially important in budgeting, financial forecasting, and strategic planning. It helps in setting rental prices, managing costs, and evaluating the financial health and viability of the property.

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