The break-even point means any point in any enterprise where the costs and profits/revenues are finally equal. This has widespread significance throughout the property and business sectors.
The break-even point occupies an important in accounting and business principles/guidelines. It means the revenues that are required for covering the total expenditure of the company within a specific timeline. It may even indicate a timeline or point where the forecasts/predictions of revenues are equal to the total costs that have been estimated. This is where the company profits start accumulating and its losses end completely. This makes the business viable from a financial perspective. Investors in any business or company will naturally be more inclined towards entities which have achieved this break-even point.
The break-even point also applies for companies engaged in the construction and development of real estate and property. Buyers or investors may look for such companies in order to choose companies with strong balance sheets and more financial viability. The break-even point could also be applied to any rental property that earns income. This is the point where the rentals generated by the property are equal to its operating costs, mortgage costs, depreciation, and taxes.
