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Breakeven Occupancy Formula

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Breakeven Occupancy Ratio is the minimum occupancy rate threshold of a property to ensure its operating expenses and debt service obligations are met, expressed as a percentage. Check FAQs

BOR = \frac{TOE + ADS}{PGI}

BOR - Breakeven Occupancy Ratio?TOE - Total Operating Expenses?ADS - Annual Debt Service?PGI - Potential Gross Income?

Breakeven Occupancy Example

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Here is how the Breakeven Occupancy equation looks like with Values.

Here is how the Breakeven Occupancy equation looks like with Units.

Here is how the Breakeven Occupancy equation looks like.

14.6241 = \frac{45000 + 803200}{58000}

14.6241 = \frac{45000 + 803200}{58000}

14.6241 = \frac{45000 + 803200}{58000}

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Breakeven Occupancy Solution

Follow our step by step solution on how to calculate Breakeven Occupancy?

FIRST Step Consider the formula

BOR = \frac{TOE + ADS}{PGI}

Next Step Substitute values of Variables

∴

BOR = \frac{45000 + 803200}{58000}

Next Step Prepare to Evaluate

∴

BOR = \frac{45000 + 803200}{58000}

Next Step Evaluate

∴

BOR = 14.6241379310345

LAST Step Rounding Answer

∴

BOR = 14.6241

Breakeven Occupancy Formula Elements

Variables

Breakeven Occupancy Ratio

Breakeven Occupancy Ratio is the minimum occupancy rate threshold of a property to ensure its operating expenses and debt service obligations are met, expressed as a percentage.

Symbol: BOR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Breakeven Occupancy Ratio

Total Operating Expenses

Total Operating Expenses represent the aggregate cost incurred by a business to maintain its day-to-day operations.

Symbol: TOE

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Total Operating Expenses

Annual Debt Service

Annual Debt Service is the total principal and interest payment owed on a financial obligation, such as a commercial mortgage loan, expressed on an annual basis.

Symbol: ADS

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Annual Debt Service

Potential Gross Income

Potential Gross Income is the total annual rental income that the property could generate if fully leased at market rental rates.

Symbol: PGI

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Potential Gross Income

Other formulas in Debt Management category

Go Senior Debt Ratio

SDR = \frac{SD}{EBITDA}

Go Mortgage Refinance Breakeven Point

MRBP = \frac{TLC}{MS}

Go Overhead Rate

OR = \frac{OC}{Rev}

Go Debt Service Coverage Ratio

DSCR = \frac{NOI}{AD}

How to Evaluate Breakeven Occupancy?

Breakeven Occupancy evaluator uses Breakeven Occupancy Ratio = (Total Operating Expenses+Annual Debt Service)/Potential Gross Income to evaluate the Breakeven Occupancy Ratio, The Breakeven Occupancy is a financial metric used in real estate to determine the minimum level of occupancy required for a property to cover all its operating expenses and debt service obligations, thereby breaking even financially. Breakeven Occupancy Ratio is denoted by BOR symbol.

How to evaluate Breakeven Occupancy using this online evaluator? To use this online evaluator for Breakeven Occupancy, enter Total Operating Expenses (TOE), Annual Debt Service (ADS) & Potential Gross Income (PGI) and hit the calculate button.

FAQs on Breakeven Occupancy

What is the formula to find Breakeven Occupancy?

The formula of Breakeven Occupancy is expressed as Breakeven Occupancy Ratio = (Total Operating Expenses+Annual Debt Service)/Potential Gross Income. Here is an example- 14.62069 = (45000+803200)/58000.

How to calculate Breakeven Occupancy?

With Total Operating Expenses (TOE), Annual Debt Service (ADS) & Potential Gross Income (PGI) we can find Breakeven Occupancy using the formula - Breakeven Occupancy Ratio = (Total Operating Expenses+Annual Debt Service)/Potential Gross Income.

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Breakeven Occupancy Formula

Breakeven Occupancy Example

Breakeven Occupancy Solution

Breakeven Occupancy Formula Elements

Other formulas in Debt Management category

How to Evaluate Breakeven Occupancy?

FAQs on Breakeven Occupancy

Variable Name