Hello everyone
I am evaluating an investment in Cando on monthly and daily rentals for holding period of 10 years.
The property is located in a affluent location of Rio de Janerio, Brazil.
My NOI for monthly rentals comes to 300USD and 500USD for daily rentals escalating by 3% per annum. The comps cap rate is 6%
Since monthly NOI for daily rentals is 66% above than monthly rentals - my sales value in the terminal year has no match to the sales value for the monthly rentals.
It is making no sense to have a different sales value for the same property only due to changes in the rental model.
I would like to have 5%-10% overall valuation difference. I have already taken a low occupancy of 55% for daily rentals but my sales value in the terminal year is still way off.
Can any one suggest quick fixes to that? Is it a good adjust cap?
Hi hammadkhan, check out these resources:
More suggestions...
Fingers crossed that one of those helps you.
If you are essentially running a hotel or Airbnb your operating expenses will be a lot higher.
Thank you for your reply. I have a local brokerage firm on board - they will manage the property. I have included all the expenses in Opex they have mentioned in their typical contract. On a conservative side - I have included insurance and capital reserves as well. But still my exit year sales value comes way off than it is in a standard monthly lease model.
Sunt quia id voluptas totam dolorem nostrum distinctio. Hic ad eligendi id molestiae ipsum. Molestias aut ea quisquam est. Quos veniam dolores sint quod sapiente. Pariatur quisquam iusto est quod non eius esse. Minima dolore corporis ducimus nisi. Ea laudantium nihil ab non nemo dolorem debitis cupiditate.
Praesentium rerum qui quos atque tenetur eos eaque. Velit enim voluptates voluptatibus provident necessitatibus. Commodi voluptas perspiciatis voluptatem est ut est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...