Direct Capitalization - Expense Analysis

The Expenses table shares similarities with the Income Analysis in regards to how you will input data; work from left to right, ensuring that Toggle Display is enabled so that you may enter new entries. Toggle Display is located to the left of the Income Analysis table. 

Using the Expenses Table

1. Expenses When you enable Toggle Display, the expense categories that appear correspond with the expense categories in the database.	Note: Altering these expense labels will result in data loss and/or compromise the data when saving the subject as a database record to your database.
2. Ender the Total Expense Amount, Not Including Reimbursements The Expense Amount should be entered as appropriate. Note whether it is a rate that is incurred yearly, by square footage, or some other special factor. Do not take into account reimbursements in this section; the adjacent table titled Reimbursements allows you to factor in those calculations.	Note: If you have imported a subject, the expense data will auto=populate, based on the "Used in Excel" instance in web. If you wish to hand enter the Pro Forma expenses, click the Clear Expense Amounts button to the right of the Expense table.
3. Select How the Expense is Incurred If the  Amount that you entered is a yearly rate, simply click into the Method drop-down and select $/Year. Otherwise, select the option from the drop-down that matches the format of the Amount you entered.
4. Select how the Data is Broken Out The last column has a configurable header, and clicking on the column cell will produce a list of four options that can be used to further break down your expenses.
4a. The Net Operating Income (NOI) is calculated automatically. The capitalization rate is entered by the analyst, as is the final and the final rounded value. Final cap rates, and values that would be inappropriate to automate, are always hand entered to ensure appraiser judgment in the valuation process.
4b. There may be scenarios where items like lease-up discounts may need to be entered below the NOI line. Hand enter the label and the amount and verify that the totals are correct in the final rounded value.

Expense Reimbursements

You can account for any reimbursements via the Expense Reimbursements table that is situated adjacent from the Expenses table. You will find each of your expenses listed on the Reimbursement table; simply select whether a certain expense is reimbursed or not via the Reimbursed drop-downs, and enter any desired notes into the Notes column.