Break-even occupancy calculator
A typical UK short let breaks even somewhere around 45% occupancy. On the figures below — £120 a night, £1,450 of monthly fixed costs and £45 of cleaning across 3.2-night stays — the break-even point is 45.0%, or 13.7 booked nights a month. Every night beyond that is £105.94 of profit.
Every night above 13.7 a month is profit at £105.94 each. Compare the break-even figure against the real occupancy your market actually achieves — if the two are close, the property has no margin for a bad season.
The formula
Break-even is the point where income exactly covers costs. The trick is that short-let costs come in two shapes: monthly bills that arrive whether or not anyone books, and a changeover cost charged once per booking rather than per night. So the first step is to spread the changeover cost across the average stay, which gives you what a booked night genuinely contributes.
The month is taken as 30.4 nights (365 ÷ 12), not 30 — using a round 30 overstates break-even occupancy by about 1.4% of its own value, which is small but free to get right.
Worked example
The numbers the calculator above is pre-filled with: a city flat with a mortgage, let at £120 a night with a £45 changeover.
In plain terms: the flat owes £1,450 on an empty month. Each booked night puts £105.94 toward that after its share of the cleaning, so it takes 13.7 nights — call it 4.3 bookings — before the property has paid for itself and starts making money. Against a market that genuinely runs at 62% occupancy, that leaves a cushion of about 38% above break-even. Against a market running at 50%, it leaves almost none.
How this is calculated
Questions about break-even occupancy
What break-even occupancy is safe?
Compare it against what your market actually achieves, because the number means nothing in isolation. A break-even of 45% in a market that runs at 65% is comfortable — you have roughly a third of your bookings as headroom before the property stops covering itself. The same 45%in a market that runs at 50% is precarious: one competitor opening nearby, one soft season, or one licensing change and you are funding the mortgage from savings. As a rule of thumb, look for break-even to sit at least 15 percentage points below the market’s realistic occupancy. If it doesn’t, the deal depends on everything going right.
Why does average stay length matter so much?
Because cleaning is charged per booking, not per night, so short stays multiply it. Dropping the average stay from 3.2 nights to two pushes the changeover cost from £14.06 to £22.50 a night and lifts break-even from 45.0% to 48.9%. Going the other way, a seven-night average cuts it to 42.0%. This is the main reason a city-break flat full of two-night stays can be less profitable than a holiday cottage taking weekly bookings at a similar nightly rate — and why setting a three-night minimum sometimes earns more than filling every gap.
What counts as a fixed cost?
Anything that arrives in a month with no bookings. Mortgage, service charge, ground rent, insurance, council tax or business rates, standing charges on utilities, broadband, licence and compliance costs, accountancy, and a realistic maintenance allowance. Two get missed constantly. The first is utilities: short lets pay their own, and an empty flat still has standing charges. The second is maintenance — furniture, linen and appliances in a short let wear out several times faster than in a tenancy, and budgeting nothing for replacement makes year one look better than years two and three really are.
What happens if my nightly rate drops 10%?
Break-even rises faster than the rate falls, because fixed costs don’t move. Cutting £120 to £108 lifts break-even from 45.0% to 50.7% — a 10% price cut costs you 5.7 extra points of occupancy just to stand still, which is 1.7 more nights to sell every month. That asymmetry is worth remembering when new supply arrives in your area and the instinct is to discount: dropping the rate to chase occupancy frequently makes the maths worse, not better.
How is this different from a yield calculation?
Different questions. Break-even asks “can this property pay its own bills, and how much room do I have?” — a cash-flow and risk question that includes the mortgage. Yield asks “what return does the capital earn?” — a comparison question that excludes financing so two properties can be judged on equal terms. A property can show a healthy yield and still be uncomfortably close to break-even if it is heavily mortgaged, which is precisely the combination that catches people out in a soft year. Run both.
What if my market's occupancy is below break-even?
Then the property loses money as a short let at current prices, and there are only four honest responses: raise the nightly rate, cut fixed costs, lengthen the average stay to dilute the cleaning, or don’t buy it. Before concluding any of those, check the occupancy figure you are using is real — a city-wide average can be well off for a specific street, in either direction. Our city guides give market-level occupancy free, and the short-let vs long-let calculator will tell you whether a straightforward tenancy is the better answer.
Check your break-even against real occupancy
Break-even is only half the picture — it tells you the target, not whether your market clears it. A HostPal Invest report measures the occupancy and achieved nightly rate for a specific address or an area you draw on the map, so you can hold the number above against what the street actually does rather than a national average.