Short answer: Break-even rent is the monthly rent at which a rental's cash flow is exactly $0. It equals your fixed monthly costs (principal and interest, taxes, insurance, HOA) divided by the share of rent left after vacancy, maintenance and management.
It uses the same formulas as FirstDoor's full deal score.
Frequently asked questions
How do you calculate break-even rent?
Add principal and interest, monthly taxes, monthly insurance and HOA. Divide by 1 minus your vacancy, maintenance and management percentages. With 5% + 5% + 8%, you divide by 0.82.
Why does break-even rent matter?
It tells you how far rent can fall, or how wrong your rent estimate can be, before the property costs you money each month.
Is break-even rent the same as the 1% rule?
No. The 1% rule only compares rent with price. Break-even rent uses your actual loan, taxes, insurance and expense budget.
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