identifies the percentage of EGI necessary to pay for all operating expenses and debt service. It is the point where cash flow begins. It is also the occupancy necessary to pay all expenses and debt service.

Since the BER describes the occupancy necessary to break-even, it can also be used as an indicator of the risk posed by such an investment. A lower break-even ratio means that a lower occupancy will satisfy the operating expenses and debt service and that would mean lower risk. The break-even ratio is calculated by dividing the total of the operating expenses and annual debt service by the effective gross income