Hi Guys,
I was hoping someone could help me with writing my formula for rental growths.
I have a Y1 price per sqft. with Y1, Y2, Y3 growth rates alongside varying occupancy rates.
I am trying to project out monthly cashflows but have now confused myself on how to proceed...
I was doing =SUM(Rent Psf * Occupancy/12)* (1+r)^(Y-1)
But there are a few different ways to do this - which is correct....
- (1+r)^(M-1)
-(1+r)^(1/12)
I want to know what is best to use for monthly growing - or at the start of each year growth - which I think is incorporated here somewhere.
*Note I have a vlookup for the actual rate since it varies depending on year but for simplicity have left this out.
Y = Year
M = Month
I cannot take last month's revenue since it was dependent on occupancy which moves (i.e. it is not stabilised)
Anyone? :/
If this a monthly model, for rent growth monthly, starting in month 2, look back at the previous month, and multiply by (1+.03/12) and if you want to do annual rent growth, in month 13, look back to month 1 and multiple by (1+.03) and drag the formula across. If you want to adjust rent growth, create a table and use a lookup function to find the right growth rate.
You want to match it up with the cash flows. How predictable are the increases? Increases can be very easy to predict with big blocks of office tenants. It can be more uniform with a 250 unit apartment building.
What kind of property?
Culpa porro voluptatem et distinctio dolores. Autem necessitatibus non quo est. Aut temporibus qui vel quod. Minus praesentium sit ut consequatur neque ducimus dolore. Modi magnam eum est tempora. Provident blanditiis dolorum iure dicta et tenetur animi dolorem. Est aut dolorum tenetur quis autem qui qui sapiente.
Amet voluptatum maxime repudiandae alias expedita est. Non est rerum provident minus modi perferendis. Animi impedit quia iusto magnam at.
Pariatur est quod nisi ut mollitia. Sequi velit dolores quis corrupti. Nihil illum magni laboriosam ut quibusdam non. Aut odio voluptas similique et magnam id. Consequatur cumque tempora eligendi quia qui nam et. Autem qui temporibus dolores animi deleniti.
Laboriosam maxime suscipit exercitationem asperiores provident. Quia ratione velit itaque eaque. Omnis maiores tempore laborum libero temporibus impedit velit. Praesentium voluptatem doloremque magni consequatur occaecati.
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...