Sale and Valuation

Adding the final details of how the cash flows will be analyzed

The final step in building a sample model is entering an Analysis period, the Reversion Information and Investment return information. These details are essential for generating return and valuation reports.

Analysis period

Financial models are an analysis of the future benefits of owning an asset within a set time horizon. The analysis start will often coincide with the property purchase date, but it does not have to. Similarly, the analysis end date and the intended sale date do not have to coincide. Leaving the analysis dates blank will default to an analysis period starting the next quarter and finishing ten years from the start.

Reversion information

The reversionary value is the theoretical sale price of a property at the end of the analysis period. Reversionary values are used to capture either the financial benefits from a sale or the capitalized returns that are expected beyond the analysis period. Reversion information is required to calculate the reversionary value.

Investment return

The final step of building a financial model is choosing a discount rate. Also known as the cost of capital or hurdle rate, the discount rate is the return that an investor requires to earn on similar investments when factoring in risk. This section is optional and is only used to calculate the return on the investment.

When ready, selecting complete property will close the quick start and display the property overview. All sections in the quick start and more can be updated in the property's model tab as covered in the guided walkthrough.