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Hello Investors!

With interest rates seemingly being in constant flux lately, the question of what the current break even point for a property kept coming up from my clients.  In an attempt to eliminate the need to do the calculation over and over again, I set out to create a spreadsheet to simply display the GRM for a property that corresponds with breaking even (no positive or negative cash flow) at different interest rates.

This calculation requires assumptions for expenses and vacancy, and I used 35% of GSI for expenses and a 5% vacancy rate.  The result is Table 1.

As an extension of the first table, I decided to create a graphic that displayed the required down payment to break even for given interest rate and GRM.  The result is Table 2.

– Josh Ess



There is a link to the downloadable PDF below!

Break Even GRM Chart PDF Download

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