DealCheck's rental and BRRRR analysis tools allow you to analyze a variety of more complex scenarios, beyond simple buy-and-hold situations.
This includes analyzing planned renovations, capital expenditures, lease-up periods or uneven property value, rent and expense increases.
This guide goes over several of the more common situations, but you can analyze many more using our analysis tools as well.
Analyzing Planned Future Expenses
It is possible that you will have one-time expenses in future years for a rental property or BRRRR, in addition to your regular operating expenses.
Here are some examples of what these may be:
Specific renovations or rehab work you plan to do in the future, both for the entire building, or individual multi-family units
Capital expenditures, including roof replacements, new floor coverings, electrical upgrades, or major home system upgrades
Other one-time or irregular expenses, like inspection fees, code upgrades, or legal fees associated with re-zoning
DealCheck's operating expenses worksheet allows you to enter and designate specific expenses as "future expenses" to be paid in specific years.
This can be done by adding a new expense item under Purchase Worksheet > Operating Expenses > Edit or Itemize and turning on the Future Expense toggle:
When you then view the Buy & Hold Projections page for this property, DealCheck will include these expenses only in the years you specify, and calculate all of the other analysis metrics for that year accordingly:
Analyzing Lease-Up Periods or Extended Vacancies
When buying new investment properties, especially multi-family, you may have "lease-up" periods and higher vacancies in the first few years of ownership, as you turn over the tenant base, perform upgrades or rehabs, and improve management efficiency.
DealCheck allows you to enter a long-term, "stabilized" vacancy rate for each property, but also to override it for each individual year as needed.
You have the option to add year-specific vacancy rates right below the main vacancy input on the Purchase Worksheet page, in the Rental Income section:
After doing so, the property analysis and buy & hold projections will update to reflect your specific vacancy rate inputs for each year of property ownership:
Analyzing Uneven Property Value, Rent or Expense Increases
DealCheck also allows you to model irregular increases of the property value, its rent, and operating expenses throughout the holding and operational period.
For example, you may be planning renovations in the first few years of ownership that will significantly increase the property's rent and value after they are complete.
Or, you may project the current inflation (which will increase your operating expenses) to increase (or decrease) in future years.
The Long-Term Projections section of the Purchase Worksheet allows you to fine-tune and control the property value appreciation rate, income and expense increases individually for each year of the property ownership period:
You can enter year-specific values for just a few specific years, or all of them - it's completely up to you. Whenever a year-specific value is not found, DealCheck will use the default value instead:
Note: The above screenshots were taken from our online app, but the same features can be found in our iOS and Android apps as well.