FINANCE HADM 3210 Hospitality Real Estate Calculations Study Guide (2025/2026) Comprehensive Document

FINANCE HADM 3210 Hospitality Real
Estate Calculations Study Guide
(2025/2026) Comprehensive Document



Effective Rent Rent
Schedule:
Year 1: $12/SF
Year 2: $14/SF Year
3: $15/SF r=12%
=NPV(.12,12:14:15)
=$32.55

Effective Rent:
=PMT(.12,3,$32.55)= $13.55 Calculating

NOI


Potential Gross Income (PGI)
-Vacancy and collection
+Miscellaneous Income
_____________________
= Effective Gross Income (EGI)
-Fixed Operating Expenses
-Variable Operating Expenses
________________________
= Net Operating Income (NOI)


Calculating Potential Growth Income First
Floor:
8 units x $900 x 12 months = $86,400
Second Floor:
4 units x $900 x 12 months = $43,200
6 units x $700 x 12 months = $50,400
Potential Gross Income = $180,000
Vacancy Loss (10%)= $18,000
EGI= PGI- Vacancy Loss= $162,000

,Fixed Operating Expenses Real
Estate Taxes
Insurance
Variable Expenses
Utilities
Garbage Collection
Supplies
Repairs
Maintenance
Management

Effective Gross Income -
Operating Expenses
= Net Operating Income

Cash Flow Projection for Investment Valuation

, Income Valuation Costing Approach Level
Perpetuities (no growth)


mu= discount rate