Entering Variable Cost Amounts

Use this area to enter the variable expenses for the property.  If you need additional rows, consider doubling up on some of the expense line items.  For example, you might include Lawn and Snow with Maintenance. You can enter any cost description that you wish.  Your entry here will appear in the income statement, and the lease template for cost recovery.  Remember to enter the total annual amount, not monthly amounts.  If you enter a monthly amount, the model will assume that it is for a full year.

 

Notice that the Property Management row has no data entry area.  This is because it will create a circular reference error in Excel.  If you plan to have property management expenses, make the entry at the top of the worksheet by using the drop down menu and choosing the basis on which management fees will be charged.

 

Do not add or delete rows to this area as it will disable the model.  If you do not need all of the rows, just delete the information and zero out the expense.

Make certain that you enter annual totals for each expense.  The model will perform all partial year calculations based upon the starting month that you specified when starting the analysis.  For example, if you specify that the analysis is to begin in month 4, the model will prorate the annual entry for this expense and assign 9 months expenses.  This may not seem intuitive, but you need to include the 4th month to the remaining months.

To increase the expenses year-over-year, you can either enter a percentage of increase, or enter the new annual amount for that year.  The model will make the necessary adjustments.  For example, you can enter a different percentage in each year, or enter a different number.