# Real Estate

> In Real Estate, the revenue drivers are the units available for rent, along with the sale value of the asset. Market dynamics affect these drivers more regularly than other business models. This creates a need to stay up to date & re-run your numbers when there's a shift. Use this model to know when is a good time to hold the property and collect rent or entertain offers to sell.

Published model on Paths: https://getpaths.io/p/real-estate
Values below are the base case of the published snapshot.

## Drivers

- Monthly Rent: $3,500.00
- Vacancy Rate: 2.5%
- OpEx Rate: 65%
- Purchase Price: $1,250,000.00
- Cap Rate Target: 5%
- Number of Units: 4

## Formulas

- Effective Rent = ( Monthly Rent * Number of Units ) * 12 -> $168,000.00
- Vacancy Loss = Effective Rent * Vacancy Rate  -> $4,200.00
- Gross Income = Effective Rent - Vacancy Loss  -> $163,800.00
- Operating Expenses = Gross Income * OpEx Rate  -> $106,470.00
- NOI = Gross Income - Operating Expenses  -> $57,330.00
- Implied Value = NOI / Cap Rate Target  -> $1,146,600.00
- Cash-on-Cash Proxy = NOI / Purchase Price  -> 4.59%