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Entering Stabilized Value Drivers
In the previous section Enter Renovation Costs , we started the renovation project with an eye toward enhancing the property and raising the rents, or "stabilizing" the property. In this section you'll enter drivers that will tell you whether or not the cash spent on renovations is justified by the proposed increase in rents.
 Increase in Rents
Enter a percentage of increase (or decrease if you so wish) that will represent the stabilized condition. The number adjusts the entry you made in section 4, Income and Expense. If, for example you entered 200,000 as the total potential and you enter 5% here, the new or stabilized rents would be 210,000, or 200,000 plus 5%.
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 Vacancy and Collection Loss
Enter the new vacancy and collection loss factor. This number is not above and beyond your entry in section 4, this is the gross entry. If the new vacancy factor is 5%, enter 5%. This entry does not modify the earlier entry you made in box 4 (Current Income and Expenses).
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 Fixed Expenses
Enter the factor for fixed expenses. This number will augment the entry that you made in section 4. If you want to decrease the fixed expense, enter a negative number. For example, if the fixed expenses were 50,000 and after stabilization you think that the fixed expenses will be 3% lower, enter -.03.
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 Variable Expenses
Enter the percentage of increase or decrease to the variable expenses that will occur as a result of the stabilization process.
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 Stabilized Date
Enter the date that the property will be stabilized. That is the date that all renovations have been completed, expenses brought in line, and vacancies filled at street rents. The model will utilize the renovation funds as of this date, and begin to use the revised income and expense numbers from this point forward.
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