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Ken Lam Realty · Tools

What if the market turns? Stress test your rental

Rent down, rate up, a unit sits empty. See your monthly cash flow in every case, and where you break even.

$
$/mo
$/yr
%
%
More settings (vacancy, loan term)
%
yrs

Expenses stay the same in every box, so only rent, rate and vacancy move. Rate change means a refinance or a new loan; a fixed-rate loan you already have does not move.

Cash flow today
$0 /mo
Break-even rentTotal rent where cash flow hits $0$0
Break-even occupancyHow full it must be to cover all bills0%
Break-even rateHighest rate before cash flow turns negative—
Worst boxRent −10% and rate +1.5%$0

Monthly cash flow: rent × rate

$100+/mo$0 to $99You pay out of pocket

Monthly cash flow: vacancy

VacancyCash flow / moRent lost / yr
Loan: $0 · Mortgage (P&I): $0/mo NOI: $0/yr · DSCR: 0

Green / yellow / red cutoffs are rules of thumb. Rate and vacancy defaults are estimates.

Ask Ken Watch 15-sec video

Email this stress test to yourself

Ken will reply and can run it on a real listing with real rents. No spam.

Or text: 408-666-2825

Next steps

  1. Not sure what "operating expenses" should be? Build the list with T261.
  2. Too much red? Find the price where it works with T260.
  3. Full numbers with cash-on-cash and 5-year IRR: T146.
  4. How much can rent go up by law each year? AB 1482 and city rules in T55.

Many people get this wrong: "I'll just refinance when rates drop." Maybe. But the rent column matters more. A 10% rent drop on a fourplex hurts more than most people think, because the mortgage and the tax bill don't drop with it.