Break-Even Occupancy

Every other number in this course is about how well the property is doing. This one is about whether you can sleep.

Break-even occupancy is the share of nights you have to sell just to not lose money. Everything above it is profit. Everything below it comes out of your salary.

The maths, which is easier than it sounds

Split your costs into two piles. Fixed costs happen whether anyone stays or not — mortgage, insurance, HOA, property tax, pool service, lawn, software, internet. Variable costs only happen when somebody books — cleaning, consumables, the platform fee, the extra utilities.

Then: break-even nights = fixed costs ÷ (ADR − variable cost per night sold).

Got it? Now run yours.

Your number

What to do when the answer is bad

There are only four levers, and they are not equally available to you.

• Raise ADR. Usually means better photos, better furnishing and a review base — real, but slow and it costs money up front.
• Cut fixed costs. Mostly means a bigger down payment or a different house. Insurance and HOA are close to immovable.
• Cut variable costs. The biggest one here is turnover, and the lever is length of stay, not paying your cleaner less. Do not solve this problem on your cleaner.
• Buy a different property. Genuinely the right answer more often than anyone wants to hear, and it is free before you close.

Also defined: Occupancy Rate · Net Operating Income · Average Length of Stay