We are regularly requested to build a financial model in the property sector. In this case it was to build a template model that would look at an investment on a property by property basis.
As with all our financial models, we always build 3 way financial models in that it must end up with an
- Income Statement,
- Cash Flow and
- (balancing) Balance Sheet.
In addition we built various other reports around the returns for an investment. The model was also built in such a way that it was easy to run what ifs to assess the likelihood of achieving the returns, or at what level of rental/ purchase price/ sales price would we achieve our desired return.
Financial Model in Property Key Features
- Flexibility with regards the financing of the property
Various repayment options
Comparison of available cash versus debt repayments
- Ability to play with the required/ anticipated rentals and possible vacancies
- Differentiation between fixed and variable costs
- Detailed graphics of monthly cash flows
- Flexibility around the eventual sale of the property and its impact on returns
For more information on a Financial Model in the Property Sector contact us at info@AuditExcel.co.za