Break-even calculator
Enter your property costs and current rent to see your break-even threshold and safety margin.
| Rate scenario | Monthly mortgage | Break-even rent | Safety margin | Break-even occ. |
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Understanding break-even rent
Break-even rent is the minimum monthly income your property needs to cover all its costs — mortgage, management, maintenance, insurance, compliance, bills, and other running costs. Any rent above break-even is profit; any rent below it is a loss you are subsidising from personal income.
The safety margin — the percentage difference between your current rent and break-even — is your buffer against adverse events: a void period, a maintenance emergency, a rent reduction negotiation, or a mortgage rate rise. A 20–30% safety margin means the property can withstand reasonable adversity without becoming loss-making. A 5–10% margin means a single adverse event could tip it into loss.
Break-even occupancy is the minimum percentage of the year the property must be let (at current rent) for costs to be covered. A break-even occupancy of 85% means the property can withstand 6.5 weeks of void per year before going loss-making — which is a reasonable buffer for a well-managed single let. An 95%+ break-even occupancy leaves only 2–3 weeks of void tolerance — very fragile.
Frequently asked questions
What is a good safety margin above break-even rent?
A safety margin of 20–30% above break-even is considered healthy for a standard UK BTL. This means if break-even rent is £900/month and actual rent is £1,100–£1,170/month, the property has adequate buffer for reasonable adversity. Below 15%, the property is fragile — one rent negotiation with a long-term tenant or a modest rate rise could eliminate profitability. Above 40%, the property has excellent resilience and significant upside potential.
For HMOs with room-level voids, a 25–35% safety margin is recommended because individual room voids are more frequent and unpredictable than whole-property voids in a single let.
My rent is below break-even — what should I do?
If your current rent is below break-even, the property is cash-flow negative — you are subsidising it from personal income. The options are: (1) increase the rent to market rate at next renewal (check local comparables — you may be significantly below market); (2) refinance to a lower mortgage rate if one is available; (3) reduce running costs (switch to self-management, reduce maintenance provision, review insurance); (4) accept the position as part of a capital growth strategy if you believe appreciation will compensate over the long term; or (5) sell if the position is not sustainable. Use the landlord cash flow calculator to model the full after-tax impact.
How does management fee affect break-even rent?
Management fee is calculated as a percentage of rent — which creates a feedback loop in the break-even calculation. A 10% management fee means that for every £1 of rent increase, 10p goes to the agent. At a 10% fee on £1,000/month rent (£100/month), self-managing saves £100/month which directly reduces the break-even threshold by the same amount. On an annual basis, self-management on a typical single-let saves £1,200–£1,800/year in management fees — which translates directly to a lower break-even rent and a wider safety margin. Use the management fee slider at 0% to see your self-managed break-even.
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