Property Development & Rental Financial Projection 3 Statement Model (Excel XLSX)

A Property Development & Rental Financial Projection 3 Statement Model is essential for real estate businesses. It projects income, expenses, and cash flows, enabling effective planning and resource allocation. This tool assists in securing financing, setting rental rates, and ensuring financial sustainability. By analyzing construction costs and property management expenses, it guides budgeting and pricing strategies. Accurate projections empower businesses to make informed decisions, adapt to market fluctuations, and enhance financial stability. It attracts investors, supports growth initiatives, and aligns financial strategies with business objectives, making it indispensable for both property developers and rental management companies, fostering their success and profitability.

PURPOSE OF MODEL
Highly versatile and user-friendly Excel model for the preparation a of an 5-year rolling 3 statement (Income Statement, Balance Sheet and Cash flow Statement) financial projection with a monthly timeline for a startup or existing business developing properties to rent and/or sell and generating rental income and property sales revenue.

The excel model allows the user to model up to 10 properties developments with multiple units (if applicable) each at different lifecycle stages. It allows the user to model the full end to end lifecycle stages from developing the properties and incurring capitalizable development costs, renting properties and selling property units.

The model also includes different variable costs on rental income, fixed costs per property unit and fixed costs incurred on a total company basis. It also includes the ability to model taxes, dividends, loans on a property development basis and changes in equity.

The model follows good practice financial modelling principles and includes instructions, line-item explanations, checks and input validations and incorporates a discounted cash flow valuation calculation using the forecasted cash flows.

KEY OUTPUTS
The key outputs include:
•  Projected full financial statements (Income Statement, Balance Sheet and Cash flow Statement) presented on a monthly basis across up to 5 years and summarised on an annual basis.
•  Dashboard with:
Summarised projected Income Statement and Balance Sheet
Compounded Annual Growth rate (CAGR) for each summarised income statement and Balance Sheet line item
List of key ratios including average revenue growth, average profit margins, average return on assets and equity and Average Debt to Equity ratio.
Bar charts summarising income statement and Balance Sheet projections
Revenue and direct expenses by development in table and bar-chart format
•  Discounted cash flow valuation using the forecasted cash flow outputs.

KEY INPUTS

Inputs are split into Income Statement and Balance Sheet Inputs. Most inputs include input validations and conditional formatting to help users understand what the input is for and populate correctly.

Setup Inputs:
•  Name of business;
•  Currency;
•  First projection year and month;
•  Naming for property developments, variable and fixed costs, company-wide fixed assets and borrowings;
•  Sales tax applicability for revenue, expense and fixed asset items.

Actuals Inputs:
•  Opening balance sheet (for existing businesses);
•  Income Statement actuals (for trend analysis);

Projection Inputs:
•  Property development, development costs, rental income and revenue from sales of units including purchase month, purchase amount, transactions costs, first rental month, units per development, value appreciation per annum, occupancy, rent per month, units sold, and transaction costs per sale
•  Variable and fixed operating expenses across the lifecycle of each property development;
•  Capitalisable costs including addition amounts and useful life;
•  Other fixed cost inputs on total company basis;
•  Sales and corporate tax inputs including rate and payment periods;
•  Dividend inputs including amount or percentage of retained earnings and frequency;
•  Borrowings including addition amounts and interest rate;
•  Share Capital additions;
•  Discount rate inputs (for valuation calculation).

MODEL STRUCTURE

The model comprises of 9 tabs split into input ('i_'), calculation ('c_'), output ('o_') and system tabs. The tabs to be populated by the user are the input tabs ('i_Setup', ‘i_Actuals' and 'i_Assumptions'). The calculation tab uses the user-defined inputs to calculate and produce the projection outputs which are presented in 'o_Fin Stats', ‘o_Dashboard' and ‘o_DCF'.

System tabs include:
•  A 'Front Sheet' containing a disclaimer, instructions and contents;
•  A checks dashboard containing a summary of checks by tab.

KEY FEATURES
Other key features of this model include the following:
•  The model follows good practice financial modelling guidelines and includes instructions, line-item explanations, checks and input validations;
•  The model contains a flexible timeline that allows for a mix of Actual and Forecast period across a 5-year period. This allows projections to be easily rolled forward;
•  Timeline is split on a monthly basis and summarised on an annual basis;
•  The model allows the user to model 10 existing or new property developments each with their own unique lifecycle, development costs, loans, rental income and revenue from sales of units
•  The model is not password protected;
•  The model is reviewed using specialised model audit software to help ensure formula consistency and reduce risk of errors;
•  The model allows for the following number of underlying categories for each line item (these can be easily expanded if required):
Property developments – 10 developments with multiple units;
Variable costs linked to rental income – 5 categories;
Fixed costs per property unit – 5 categories;
Fixed costs total company – 15 categories;
Fixed Assets – 5 Categories
Borrowings – 10 facilities (1 for each property development)
•  Apart from projecting rental and unit sales income and expenses the model includes the possibility to model depreciation of capitalizable costs, borrowings, dividends and corporate and sales tax;
•  Business Name, currency, starting projection period and volume units are fully customisable;
•  Revenue, cost and fixed asset descriptions are fully customisable;
•  The model included an integrated discounted cash flow valuation using the projected cash flow outputs;
•  The model includes instructions, line-item explanations, checks and input validations to help ensure input fields are populated accurately;
•  The model includes a checks dashboard which summarises all the checks included in the various tabs making it easier to identify any errors.