Where we are continuing to develop detailed financial models, we use a quick thumbnail model to look at the economic viability of a property. That is the model shown on each of our property information pages.
Purchase
This section shows the Purchase and closing cost estimates of the property. The last two lines show the Total Value and Market Value estimates.
- Total value is the cost of the property plus all improvements put into the property for each year.
- Market Value is simple growth projection based upon a 25% increase in value based on improvements and income until it tops out at the maximum value . This value is set by the real estate specialist in our Sicilian legal firms estimate of what this properties would be worth when fully improved.
Improvements
This section provides a rough estimate/budget for improvements that we feel need to be done on the property across the projected time frame.
- Initial Improvements are those that are needed to get the property generating an income at the earliest possible time.
- Deferred Maintenance is getting the property up-to-date on maintenance which was needed at the time of purchase.
- Specific Projects The lines after Deferred maintenance detail specific projects that should be done to improve the property’s earning potential.
Income
This section is an estimate of the earning potential for the property for the projected time frame.
- Occupancy is our projection of how much of the time a rental unit will be generating income. This starts low and slowing increases as we become better known in our market place. This is based upon the short term rental market place. It understates the mid and long term rental markets.
- Net Monthly is the total rental income for a unit less any expenses related to the rental of that unit.
Summary
In the last column of Total improvements and Total income is a number that shows the total of that line for the period presented.
The number under the Total improvements summary is the total invested in the property.
The numbers under the Total income shows the accumulated total income through that year.