This document outlines an investment model for acquiring, renovating, and renting out a residential property. Key aspects of the model include:
- Acquiring a property for $50,500 including fees and renovating it for $28,800.
- The renovated property will have 18 rental rooms and be rented out to generate income which increases 10% annually.
- Operational costs also increase 10% per year and the property is expected to be sold after 10 years for $472,040, realizing a gain of $238,738.
- Financial projections show the investment has a net present value of $685.60, internal rate of return of 30.22%, and pays back in
Call Girls in Gomti Nagar - 7388211116 - With room Service
Property Investment Model
1. INTRODUCTION
This model suitable for small to mid size investor that willing to capture value through:
- Acquisition / purchasing property asset (such as home)
- Renovation on acquired asset to be prepared for rental
- Get rental income after the renovation
- Sell the property after some desired holding period of asset
Guidance for the model:
- All input cells only apply in "Assumptions" sheet
- All input cells remark by green cell
- All the key result can be seen in "Executive Summary" sheet
- The complete yearly projection can be seen in "Yearly Projection" sheet
- "Monthly Detail Figure" sheet provided to see the detail components
2.
3. General Assumptions
Local Currency
Standard Measurement
Required rate of return
Occupancy Rate
Income Tax
USD
meter
30.00%
80.00%
25.00%
Increase in Rental Income /Year
Increase in Operational Cost /Year
10.00%
10.00%
Acquisition of House (in local currency, unless stated)
Market Price
Other fees
Total Acquisition Value
48,000.00
2,500.00
50,500.00
Using Mortgage for refinancing
Mortgage Amount
Interest Rate (Effective)
Tenor (years)
Equity Financing for acquisition
Yes
48,000.00
9.00%
20.00
2,500.00
Renovation Figures
Room Size
3 x 3
3 x 4
3 x 5
4 x 4
4 x 5
5 x 5
2 x 2
4 x 4
2 x 3
Type
Mini Studio
Regular Studio
Large Studio
One Bedroom - Type A
One Bedroom - Type B
One Bedroom - Type C
Public Bathroom
Free Space
Terrace
Number of Room
6
3
0
5
2
2
3
3
3
Rental Income / month (in local currency)
Mini Studio
Regular Studio
Large Studio
One Bedroom - Type A
One Bedroom - Type B
One Bedroom - Type C
N/A
N/A
N/A
Other Operating Income
Other Operating Income
Other Operating Income
100.00
150.00
200.00
250.00
300.00
350.00
-
Non-Effective
Area
No
No
No
No
No
No
Yes
Yes
Yes
Area Outside
Building
No
No
No
No
No
No
No
No
Yes
4. Operational Cost (in local currency, unless stated)
Manpower
Cleaning Service
Receptionist
Security
Others
Others
Number of shift
per day
2
1
2
0
0
Other Operational Expense
Electricity
Water
Phone
Advertising
Stationery
Maintenance
Others
Others
Others
Others
Cost per month
100.00
50.00
10.00
30.00
10.00
10.00
-
Number of person
per shift
1
1
1
0
0
Salary per person
100.00
150.00
120.00
-
5. House specification as per Acquisition
House specification after Building Renovation
Address:
Address:
Orchad St #1
Orchad St #1
Land size (in square std measure)
Building size (in square std measure)
Number of Floor
Number of Bedroom
Electricity
Fixed Line
106.00
175.00
2 floor
9 rooms
2,200 watts
1 line
Land size (in square std measure)
Building size (in square std measure)
Number of Floor
Number of Bedroom
Electricity
Fixed Line
Other Notes:
Other Notes:
Own certificate and heading to the west
Own certificate and heading to the west
Construction Cost for Building Renovation (in local currency)
Civil Works
Mechanical & Air Ventilation
Interior Design
Other Costs
Construction started at month
Construction period (months)
35.00
35.00
10.00
10.00
1
6
Depreciation (years)
Building Depreciation Period
Renovation Amortization Period
20
20
Exit Strategy (in local currency, unless stated)
Selling at month
Cost of Sales
Long Term Capital Gain Tax
Recaptured Depreciation Tax
120
5.00%
10.00%
8.00%
/square meter
/square meter
/square meter
/square meter
106.00
320.00
3 floor
18 rooms
2,200 watts
1 line
6. Investment Figure
Total Acquisition of Property
Renovation of Property
Total Investment
Mortgage Financing
Equity Investment
50,500.00
28,800.00
79,300.00
48,000.00
31,300.00
10-Years Operational Figures
Income Statement
Rental Income
EBITDA
EBIT after Other Income
Net Profit after Extraordinary Items
Cash Flow Statement
Cash Flow from Operating Activities
Cash Flow from Investing Activities
Cash Flow from Financing Activities
Net Cash Flow
Ending Cash Balance
Balance Sheet
Total Asset
Total Liability
Total Equity
Mortgage Schedule
Mortgage Interest Payment
Mortgage Total Payment
Mortgage Ending Principal Balance
Others
Growth in NOI
Capitalization Rate
Selling Price (PSM* Total Building)
Cost Basis after renov (PSM* Total Building)
Cost Basis before renov (PSM* Total Building)
0
1
-
14,400.00
10,400.00
7,275.00
2,243.61
(50,500.00)
50,500.00
-
9,652.13
(28,800.00)
23,617.58
4,469.71
4,469.71
50,500.00
48,000.00
2,500.00
80,644.71
47,101.10
33,543.61
48,000.00
(4,283.52)
(5,182.42)
47,101.10
0.00%
30.00%
157.81
288.57
0.00%
30.00%
260.00
247.81
288.57
9. Year Reference
0
1
INCOME STATEMENT
Revenue
Operational Expense
EBITDA
Depreciation of Building
Amortization of Renovation
EBIT Before Other Income
Other Income
EBIT After Other Income
Interest
EBT
Income Tax
Net Profit Before Extraordinary Item
Gain / Loss in Selling Property
Long Term Capital Gain Tax
Recaptured Depreciation Tax
Net Profit After Extraordinary Item
Note:
EBITDA
EBIT
EBT
-
14,400.00
(4,000.00)
10,400.00
(2,525.00)
(600.00)
7,275.00
7,275.00
(4,283.52)
2,991.48
(747.87)
2,243.61
2,243.61
: Earnings Before Interest, Tax, Depreciation, and Amortization
: Earnings Before Interest and Tax
: Earnings Before Tax
CASH FLOW STATEMENT
Cash Flow from Operating Activities
Cash Collection from Rental Income
Cash Collection from Other Income
Cash Payment for Operational Expense
Cash Payment for Tax
Total Cash Flow from Operating Activities
Cash Flow from Investing Activities
Cash Payment for Acquisition
Cash Payment for Renovation
Cash from Selling Property (Net of Tax)
Cash Flow from Investing Activities
Cash Flow from Financing Activities
Mortgage Principal Borrowing
Mortgage Principal Repayment
Mortgage Interest Payment
Equity Investment
-
14,400.00
(4,000.00)
(747.87)
9,652.13
(50,500.00)
(50,500.00)
(28,800.00)
(28,800.00)
48,000.00
2,500.00
(898.90)
(4,283.52)
28,800.00
10. Total Cash Flow from Financing Activities
50,500.00
23,617.58
Net Cash Flow
-
4,469.71
Beginning Cash Balance
Ending Cash Balance
-
4,469.71
BALANCE SHEET
Asset
Cash
Building
Accum. Depr & Amort of Building
Total Asset
Liability
Mortgage
Total Liability
Equity
Equity Investment
Retained Earning
Total Equity
Total Liability & Equity
50,500.00
50,500.00
4,469.71
79,300.00
(3,125.00)
80,644.71
48,000.00
48,000.00
47,101.10
47,101.10
2,500.00
2,500.00
50,500.00
OK
31,300.00
2,243.61
33,543.61
80,644.71
OK
48,000.00
48,000.00
OK
48,000.00
(898.90)
(4,283.52)
(5,182.42)
47,101.10
OK
(50,500.00)
(50,500.00)
(28,800.00)
(28,800.00)
MORTGAGE SCHEDULE
Beginning Principal Balance
Principal Borrowing
Principal Repayment
Interest Payment
Total Payment per month
Ending Principal Balance
PROPERTY VALUATION
Investment
Acquisition of Property
Renovation
Total Investment
Income Tax Payable
Rental Income
Other Income
Operational Expense
True NOI
Depreciation & Amortization
-
14,400.00
(4,000.00)
10,400.00
(3,125.00)
11. Interest
Taxable Income
Income Tax Payable
Cash Flow After Taxes (CFAT)
True NOI
Debt Service
Pretax Cash Flow
Income Tax Payable
Cash Flow After Taxes (CFAT)
Growth in NOI
Capitalization Rate
Recaptured Depr & LT Cap Gain on Property Sale
Selling Price (Fair Value)
Cost of Sale
Net Selling Price
Cost Basis (Land, Building, & Renovation)
Accumulated Depreciation
Book Value of Property
Realized Gain (Loss) on Property Sale
Recaptured Depreciation
Long-term capital gain on property sale
Selling Price (PSM* Total Building)
Cost Basis after renov (PSM* Total Building)
Cost Basis before renov (PSM* Total Building)
*PSM = Per Standard Measure
Tax due on Property Sale
Tax on Recaptured Depreciation
Tax on Long-term capital gain
Total tax due on property sale
-
(4,283.52)
2,991.48
(747.87)
-
10,400.00
(5,182.42)
5,217.58
(747.87)
4,469.71
0.00%
30.00%
0.00%
30.00%
50,500.00
50,500.00
(50,500.00)
(50,500.00)
83,200.00
(4,160.00)
79,040.00
79,300.00
(3,125.00)
76,175.00
2,865.00
(2,865.00)
-
157.81
288.57
260.00
247.81
288.57
5,050.00
5,050.00
(229.20)
(229.20)
Equity Reversion After Tax (ERAT)
Net Selling Price (Fair Value)
Outstanding Mortgage Balance
Before Tax sales proceeds
Taxes due on property sale
Equity Reversion After Taxes (ERAT)
(48,000.00)
(48,000.00)
5,050.00
(42,950.00)
79,040.00
(47,101.10)
31,938.90
(229.20)
31,709.70
Total Cash Flow
Accumulated Total Cash Flow
Discounted Cash Flow
Accumulated Discounted Cash Flow
(50,500.00)
(50,500.00)
(50,500.00)
(50,500.00)
(24,330.29)
(74,830.29)
(18,715.61)
(69,215.61)
12. Net Present Value (NPV)
Internal Rate of Return (IRR)
Payback Period (years)
Discounted Payback Period (years)
Cash Multiple
685.60
30.22%
4.67
9.96
8.78
33. Month Reference
Year Reference
0
0
1
1
INCOME STATEMENT
Revenue
Mini Studio
Regular Studio
Large Studio
One Bedroom - Type A
One Bedroom - Type B
One Bedroom - Type C
N/A
N/A
N/A
Total Revenue
-
-
Operational Expense
Salary
Cleaning Service
Receptionist
Security
Others
Others
Total Salary
Electricity
Water
Phone
Advertising
Stationery
Maintenance
Others
Others
Others
Others
Total Other Op. Exp
Total Op. Expense
-
-
EBITDA
-
-
Depreciation of Building
Amortization of Renovation
Total Depreciation & Amortization
-
(210.42)
(210.42)
EBIT before Other Income
Other Operating Income
Other Operating Income
Other Operating Income
Total Other Operating Income
-
(210.42)
-
34. EBIT after Other Income
-
(210.42)
Interest
-
(360.00)
EBT
-
(570.42)
Income Tax
-
142.60
Net Profit before Extraordinary Item
-
(427.81)
MORTGAGE SCHEDULE
Beginning Principal Balance
Principal Borrowing
Principal Repayment
Interest Payment
Total Payment per month
Ending Principal Balance
48,000.00
48,000.00
48,000.00
(71.87)
(360.00)
(431.87)
47,928.13
(50,500.00)
(50,500.00)
(4,800.00)
(4,800.00)
TOTAL INVESTMENT
Acquisition of Property
Property Renovation
Total Investment