Break-even point of transformation: what percentage of flats must be sold to cover project costs
Published 6 November 2026
There is no single universal percentage: the break-even point for flat conversion is the share of sold units whose revenue must cover all project costs and the alternative value of selling the building intact. This varies by building based on sale prices, construction costs, timeline and market pace. Below you will find the calculation method and the key factors that shift the break-even point.
Summary
- Break-even is the share of units whose sale covers total project costs; it varies for each building.
- The right threshold is not just recovering investment, but comparing with selling the building intact.
- Break-even is most affected by sale prices, scope of construction work, project duration and sales pace.
- Every project passes through three gates (legal, permit, sales) and proceeds only with confirmed figures.
- A rough calculation can be done in the online calculator; binding figures come from a paid feasibility study.
Why there is no single correct percentage
There is no universal percentage of sold flats that would apply fairly to every building. The result depends on the building's structure, its condition, location and how the project is financed.
Two buildings with the same number of units can have completely different break-even points. One may need only light refurbishment of common areas and new utilities, while another requires structural work like replacing ceilings or the roof. This is why the article does not offer a standard table value, but a methodology that the owner can apply to their own figures.
The typical difference in value between selling a building intact and selling individual units is +20–40%. This is only a rough range; the exact figure will be determined by a feasibility study of the specific building.
Two different definitions of break-even
Before you start calculating, decide which definition of break-even you are using. In practice, there are two.
- Cash break-even: the share of sold units at which revenue covers all expenses incurred (construction work, design fees, permits, financing, sales costs). From this point on, the investment is recovered.
- Economic break-even: the share of sold units at which revenue covers costs and additionally reaches the amount you would have received from selling the entire building without transformation.
The second definition is more important for the owner's decision. If the building could be sold intact for a certain amount, conversion only makes sense if you get more from selling individual units. Cash break-even is mainly useful for cash flow planning; economic break-even determines whether to pursue the project at all.
How to calculate break-even step by step
The calculation has five steps and uses only verifiable data.
- Estimate revenue from all units. Take the floor area of each unit and apply a realistic sale price per square metre after renovation, not advertised prices.
- Sum up project costs. These include construction work, design documentation, permits under the Czech Building Act No. 283/2021 Coll., legal preparation, registration in the Czech Land Registry (katastr nemovitostí), sales costs and contingency reserve.
- Add time costs. These include loan interest, building maintenance, insurance and foregone rental income if units are vacated during renovation.
- Define the alternative. Establish the building's value if sold intact. For economic break-even, add this to the costs.
- Divide. The ratio of total costs (including the alternative value) to total expected revenue gives the final percentage of units to be sold.
The formula is simple: break-even = (costs + time costs + alternative value) ÷ revenue from selling all units. Note: units do not sell for the same price. Higher floors and units with balconies command a premium, so the percentage of units sold may not equal the percentage of revenue achieved. It is therefore more reliable to calculate based on revenue rather than just the number of units.
You can get a rough estimate using the building potential calculator.
Factors that shift the break-even point
Five variables most strongly influence break-even, each affecting it differently.
Sale price
Higher achieved prices reduce the share of units needed to cover costs. However, prices depend on location, layout and build quality. Overly optimistic estimates are the most common source of calculation errors.
Construction costs
The scope of work on structures, utilities and common areas often changes during the project. This is why a contingency reserve is included and construction costs are recalculated after permit approval.
Time to completion
Every additional month increases financing and operating costs. This also includes administration: ownership rights to the property transfer only upon registration in the Czech Land Registry (katastr nemovitostí), and the cadastral office cannot decide before twenty days after notifying the owner (Czech Cadastral Act No. 256/2013 Coll.). Average registration time is approximately 22 days, so payment for a sold unit does not arrive on the day of contract signature.
Market pace
Slower sales mean units remain unsold longer, financing is paid for longer and there is pressure for discounts. Pace is the least certain variable, so it is calculated in scenarios.
Seasonality
Buyer interest fluctuates throughout the year; for example, it tends to be weaker during the summer holidays or around public holidays. Completing the project just before a slow season can extend the path to profitability, so it is wise to plan the timing of sales with seasonality in mind.
How break-even changes by scenario
The same building can have significantly different break-even points under different assumptions. The following examples are illustrative and without specific figures; they only show the direction of change.
| Scenario | What changes | Impact on break-even |
|---|---|---|
| Building with no debt, lighter renovations, sales in a favourable season | Low financing costs, short project timeline | Break-even is lower; fewer units need to be sold |
| Building with mortgage debt, major structural replacement needed | Higher construction costs and interest; bank requires share of proceeds | Break-even is higher; a larger share of units must be sold |
| Slow market, project completed before a weak season | Sales period is extended | Break-even shifts upward due to time costs |
| Higher price due to quality execution and location | Higher revenue per unit | Break-even falls even with higher quality costs |
For buildings encumbered by a mortgage (Czech: zástavní právo), it must also be calculated that the bank will require a portion of proceeds to be paid in exchange for discharging the lien. This shifts the cash break-even upward because not all revenue remains with the owner.
How break-even is monitored within project structure
Break-even is not a figure calculated once; it must be verified throughout the project.
The project therefore passes through three gates: legal, permit and sales. Progress to the next phase only happens with confirmed figures. This means that before construction begins, the legal status, permits and demand are all verified. If any assumption proves untenable, the owner learns this before investing the majority of funds. The full process is described on the How it works page.
When selling units, payment methods must also be carefully managed: cash payments are limited to CZK 270,000 per day (Czech Act No. 254/2004 Coll.), so transactions proceed electronically, typically through attorney escrow (Czech: advokátní úschova). The tax implications of sales are governed by the Czech Income Tax Act No. 586/1992 Coll. and depend on factors such as the holding period and residential use; verify details with the Czech Tax Office or a tax adviser. Transfer tax on real estate was abolished (Act No. 386/2020 Coll.), so buyers do not pay it.
What to do now
The fastest route to your own break-even calculation is through documentation and a paid feasibility study.
- Gather an extract from the Czech Land Registry (katastr nemovitostí), building plans, a summary of rental agreements and information on any mortgages or loans.
- Note the building's current condition, the scope of necessary repairs and its value if sold intact.
- Try a rough calculation in the building potential calculator.
- For binding figures, use Audit and Plan; the feasibility output takes up to six weeks.
You can obtain a non-binding quote or property assessment via the form below the article. None of this commits you to any further step.