Break-Even Ratio
How much of the rent is already spoken for by the mortgage and the bills - whatever is left over is your safety cushion.
The break-even ratio is the share of the monthly rent that is already spoken for — loan payment plus taxes, insurance, HOA and management. The rest is your cushion.
A 56% break-even means costs eat 56% of the rent: the rent could drop 44% (or occupancy fall to 56%) before the property stops covering itself. Lower is safer.
OnOffDeals colors every deal by this number: GREEN at 80% or below (healthy cushion), YELLOW between 80–100% (thin margin), RED above 100% (the rent does not cover the costs). It is the fastest honest read on a rental’s safety.