A spreadsheet is what we know as a data file which consist of rows and columns used for sorting information inputted by the user to control and organize, usually numerical, data efficiently. By using a spreadsheet to build a financial report, it became a great tool for different use cases in finance. A financial spreadsheet is mostly utilized by companies, entrepreneurs, and other entities. Same goes for real estate businesses.
All the needed calculations to come up with an analysis of the financial feasibility of a real estate property can be really troublesome, so creating a real estate spreadsheet is very convenient to be more efficient. The scope of what commonly used calculations in a Real Estate spreadsheet, to be applied and pulled together to help make a sound decision, are the following:
- Gross Potential Income (GPI)
- Gross Operating Income (GOI)
- Cash Flow Before Taxes (CFBT)
- Cash Flow After Taxes (CFAT)
- Net Operating Income (NOI)
- Capitalization Rate (Cap Rate)
- Break-even Ratio
- Return on Equity
The real estate industry nowadays is growing more and more, so the competition will be tougher. Without a proper game plan, you might lose your position and not survive. If you are in a real estate business and want to up your game, creating a real estate spreadsheet will be able to help you manage your business better and might even find opportunities where you can potentially grow your business.
So, make a move and start creating a working real estate spreadsheet now. If you don’t know how to create one, you can always download a template instead to guide you how to prepare one for your business. Try visiting eFinancialModels, a platform that offers industry specific financial model templates which are made by experienced financial modeling experts. There you can find different Real Estate model templates that you can use to start your very own model.