Property Management
The 'break-even ratio' for a Louisiana rental property is calculated as:
ANOI ÷ Debt Service
B(Operating Expenses + Debt Service) ÷ Gross Potential Income✓ Correct
CCap Rate ÷ Vacancy Rate
DNet Income ÷ Total Investment
Explanation
Break-even Ratio = (Operating Expenses + Debt Service) ÷ Gross Potential Income. It indicates the minimum occupancy percentage needed to cover all expenses and debt service — above this ratio the property generates positive cash flow.
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