READING THE FILE
01What catches the eye
Our second example imagines a three-unit building. Assumed total rent of €3,000 a month creates interest. Before concluding anything, establish the property’s status and feasibility of the proposed use.
02What the project costs
For this exercise only, costs are €63,000 and works €90,000, for total cost of €573,000. Rent is a project assumption, not existing income.
03What the calculation reveals
Two vacant months and €6,500 annual expenses yield €23,500 net before tax and financing. This depends directly on the works and the letting scenario being achieved.
04The decision still needs preparation
Separate unit-status checks, quotes, work schedules and rental assumptions. A spreadsheet ignoring those dependencies gives a precise number for an uncertain situation.
Projected rent and an undocumented budget remain assumptions even when the result looks attractive.
The remaining questions
- Is each unit’s planning status established?
- Do the quotes cover comparable work programmes?
- Does the rent-free schedule cover the works’ actual duration?
