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Analyzing Complex Rental and BRRRR Projection Scenarios
Analyzing Complex Rental and BRRRR Projection Scenarios

Model and analyze planned renovations, lease-up periods or uneven property value, rent and expense increases.

Cindy Bellford avatar
Written by Cindy Bellford
Updated over a week ago

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 most 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 on the Purchase Worksheet page, under Operating Expenses > Edit or Itemize and turning on the Future Expense toggle:

Example of a planned future operating expense

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:

Buy and hold projections with a planned future expense

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:

Example of a lease-up or high vacancy period

After doing so, the property analysis and buy & hold projections will update to reflect your specific vacancy rate settings for each year of property ownership:

Buy and hold projections with custom vacancy for specific years

Analyzing Uneven Property Value, Rent or Expense Increases

DealCheck also supports modeling irregular increases in 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:

Example of accelerated appreciation in the first few years

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:

Buy and hold projections with accelerated appreciation for the first few years

Note: the above screenshots were taken from our website, but the same features can be found in our iOS and Android apps as well.

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