Master Lease Property ROI Calculator
Master lease = you lease the entire property from owner at fixed rent, then sub-lease individual units at market. Spread = your profit. No down payment, no loan. Calculate spread, ROI, and breakeven occupancy.
| Gross potential rent (all units full) | — |
| Effective rent (occupancy adjusted) | — |
| Minus master rent paid to owner | — |
| Minus operating expenses | — |
| Monthly cash flow (spread) | — |
| Annual cash flow | — |
| ROI on upfront deposit | — |
| Breakeven occupancy required | — |
A master lease (sometimes paired with an option to purchase = MLO) lets you control a property's cash flow with no down payment, no bank loan, no qualifying. You lease from owner at fixed rent, sub-lease at market, keep the spread. Done at scale, master lease deals can generate 50-200%+ ROI on the upfront security deposit because there's almost no cash invested.
How Master Lease Math Works
Example: 6-unit apartment building. Owner agrees to master lease at $8K/mo fixed for 5 years. You sub-lease each unit at $1.8K market = $10.8K gross. After 92% occupancy and $1.2K opex, you net $2.6K/mo. With $15K deposit, that's $31K annual / $15K = 207% ROI. Owner is happy: guaranteed rent, no tenant headaches. You're happy: infinite leverage, control without ownership.
The Big Risk — Vacancy
Every empty unit costs you the master rent obligation. If breakeven occupancy is 85% and your building runs 70% one quarter, you write a check to owner. Mitigation: (1) Pick properties with strong rental demand. (2) Build 6-month reserves equal to master rent. (3) Negotiate vacancy buy-down clause (owner takes back unleased units after 90 days vacant). (4) Add option-to-purchase clause to convert to ownership if cash flow proves stable.
Last updated May 2026. Sources: BiggerPockets Master Lease.