Finacial-Edu: Your Financial Knowledge Source RESIDENTIAL REAL ESTATE EXCEL MODEL
Accounting & Finance
Asset Management
Investment Tools
Project Management
- more
Guides & Courses
Excel & VBA
Trading & Investing
- more
Investing & Trading
Futures & Options
IRA + 401k
Quotes & Data
Real Estate & REITS
Software & Tools
- more
Investing & Trading Software
- more
Tools & Models
Forms & Templates
Graphing & Charting Tools
Risk & Portfolio Models
Trading Models
- more
  Print this page      

Development of a Real Estate Spreadsheet in Excel


Designing a reliable real estate spreadsheet necessitates a little prior thinking around the functions, calculations, and output you are considering. This should be accomplished before you actually get going.  Here we exhibit some important things to consider with an example.

To show the right procedure for designing and constructing a real estate spreadsheet with a spreadsheet, let's use a non commercial multi-unit fixing up venture example.  To be sure it's realistic, let's suppose it has five condo spaces, was developed 40 years in the past, has a few present tenants, and is in need of new interior and external fresh paint, some plumbing and utility work to upgrade the property to current health and safety requirements, and a limited re-roofing to mend some water damage.

Our initial step is to capture non-numerical data into the spreadsheet, so we save a tab for that. This is utilized for site and condition facts such as address, zoning category, residence and industrial, community, occupancy in the building and vicinity, type of schools, and so forth.  This will be great for funding and insurance purposes, as well as keeping track of a number of properties if you have a large real estate account or a property supervision company.  You should put it into a typical database file format in the event you want to save and research the details in the future.

It is good to take a look at expenses, so we save a worksheet in the real estate spreadsheet for that purpose.  Here, you've got a decision.  You can possibly create a large list of common construction and managing charges or a reduced list of expenses related specifically to this asset specifically.  The former choice allows you to use the Excel spreadsheet for other investments that are not really identical to this one.  The second item makes it simpler and could be better if this is a once-off investment.  Either way, you need to include all of the fees in a timeline schedule by month.  This should incorporate the covering, coloring, water lines, wiring, gardening, insurance coverage, etc.  The money costs are apt to be the most intricate because you have to approximate not only the interest rates of the loan you have, but the principle prepayment rates, home loan policy, etc.  This may be complicated from a calculations standpoint.  How intricate in the calculations you get with expenses is for you to decide.

As this is a non commercial rental building it makes sense to include rental earnings in your real estate spreadsheet.  That's obvious. What isn't so obvious are things such as interest on renters' money deposited, financial assistance, taxes, and other such details.  When you're creating the Excel model you want to approximate when those profits will appear, and that concerns the quantity of tenants, the rental rates you charge, how long the lease term is for each tenant, and other details.  You ought to plan for some late rents, evictions, and empty apartments.  If you haven't become familiar with the location before this may be a problem.  You can assemble knowledge on that by speaking to nearby realtors, banks, and tax assessors, or subscribe to a business data bank that handles the neighborhood. 

Usually you also need to think about taxes.  Are local property taxes imposed prior to when they're due?  As part of the home mortgage payments?  How often are they? When will they really need to be paid?  Are there any bookkeeping costs?  Is it possible to obtain any tax writeoffs?  How will you estimate depreciation if that is a tax break?  Property taxes can be quite intricate and you need them in your measurements or your profit estimates will probably be erroneous.

Subsequently, coming up with and constructing a real estate spreadsheet is complicated.  Hopefully this short article gave you some helpful instruction

Author URL:

SHARE THIS ARTICLE: Digg this reddit Fark
Excel Real Estate Model
Home | Guides + Courses | Tools + Models | Articles Library | Site map
Copyright 2000-2013 All rights reserved.