Property Cashflow Analyser

Property Cashflow Analyser

Purpose: The Property Analyser is a tool to evaluate a property’s cashflow characteristics. The areas highlighted in green are for the user to enter data. The yellow highlighted cells are automatically calculated. Enter in the basic information of the transaction and the spreadsheet will calculate several common ratios and profitability measures. Values are already entered in certain cells to demonstrate how the spreadsheet works. Type over the green cells with new information to analyse your transaction.







Definitions

Loan to Value (LTV) = Loan / Property Value

LTV is a measurement of leverage. The higher the LTV, the more leveraged a property. Bank's use this to determine the riskiness of a loan. Generally, banks do not loan above 85% LTV.

Net Operating Income (NOI)

Total Potential Income

-Vacancy

=Effective Gross Income

-Operating Expenses

=NOI

NOI measures the profitability of a property by excluding the cost of debt (mortgage). It essentially looks at the profitability of the property if it were paid off.

Cap Rate - Net Operating income / Sales Price

The Cap Rate is common measurement tool used by real estate professionals to measure the attractiveness of a property.

Cap Rate measeures NOI as a percent of Sales Price. The higher the Cap Rate the better.

NOTE: This spreadsheet provided is best used as a reference and should not be considered a substitute for proper property analysis and should be used at your own risk.

Indicates an area for the user to enter data.
Indicates an area that is automatically calculated.


Net Yield