Shows the ratio (as a percentage) between a property's combined operating expenses plus debt service (outflow) to it's gross operating income (inflow).
"Gross operating income is all rental and other income produced less an allowance for vacancy. Debt service is the annual principal and interest loan payment."
You project a first-year rental income of $61,400, 5.5% vacancy, and 42% operating expenses. You want to know whether the break-even ratio is viable if you finance $368,400 at 4.75% for 30 years.
"Operating expenses are computed as a percent of gross operating income for entries 1 - 100."
"For best results, use annual amounts for all entries."
Solves the break-even ratio.