Renewal or reletting: break-even calculator
Compare keeping a tenant with a renewal offer against reletting after a vacancy, using the same time horizon.
Enter your comparison assumptions
Result over the same comparison period
A positive difference favours reletting only under the inputs above. Break-even is measured from the decision date, including vacancy. It may fall beyond the selected comparison horizon.
Method and a worked example
Reletting net = new monthly rent × max(0, horizon − vacant months) − reletting costs
Break-even horizon = (new monthly rent × vacant months + reletting costs) ÷ (new monthly rent − renewal monthly rent)
Illustrative assumptions: renew at HK$8,000; relet at HK$9,000 after 2 vacant months with HK$6,000 costs. Over 12 months, renewal produces HK$96,000 versus HK$84,000 after reletting costs. Reletting catches up after 24 months from the decision date if both rents stay constant.
What break-even means
The formula applies when the reletting rent exceeds the renewal offer. If it is lower, or equal with vacancy or costs, the model reports no catch-up. Equal rent with no foregone rent or costs is equal from month zero.
Scope and limits
This is a constant-rent comparison of two scenarios, not a recommendation to raise rent or end a tenancy. It excludes collection risk, management fees, recurring holding costs, tax, financing, partial months, discounts and stepped rents. It assumes the renewal starts immediately and reletting follows the entered vacancy. A break-even beyond an enforceable lease term is only a mathematical extension.
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The CSV contains the inputs, formulas, units, method edition and calculated values above. It is generated from these inputs and contains no tenant data or market statistics.
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Use the permanent method URL when explaining the formula. Include the scenario link and assumptions when quoting a calculated result.
Author and maintainer: E11 SPACE. Edition date refers to the method, not a market observation date. For corrections, contact the team and include the method URL and inputs.