Apartment for Sale, 32m2, Dobra Voda, Budva

Description

Profitability calculation

Income:

1. Daily rental during the season: 70 euros * 90 days = 6,300 euros

2. Rent out of season: 400 euros * 8 months = 3,200 euros Total income for the year: 6,300 euros + 3,200 euros = 9,500 euros

Expenses:

1. Advertising (only in season): 15% of 6,300 euros = 945 euros

2. Apartment maintenance: 210 euros

3. Annual tax: 400 euros Total expenses for the year: 945 euros + 210 euros + 400 euros = 1,555 euros

Calculations of indicators of financial efficiency of investment in an apartment:

1. Net profit for the year: 9,500 euros (income) - 1,555 euros (expenses) = 7,945 euros 2. Marginal profit: Rental income (excluding fixed costs such as taxes) - advertising costs = 9,500 euros - 945 euros = 8,555 euros 3. Capital turnover ratio: 9,500 euros (annual income) / 95,000 euros (cost of apartment) = 0.1 (or 10%) 4. Return on Investment (ROI): 7,945 euros (net profit) / 95,000 euros (initial investment) = 0.0836 (or 8.36%) 5. Percentage of total expenses to total income: 1,555 euros (total expenses) / 9,500 euros (total income) = 0.1637 (or 16.37%) These metrics give you an idea of how your investment is performing for you and what potential it has for future income.