July 24, 2021

Elements of a Good Real Estate Template

Designing a good real estate template in Excel requires some prior thought about the end use, components, and calculations needed. This article discusses some of the nuances that will help you either build your own or choose an effective pre-built Excel spreadsheet.

One of the initial considerations is what type of investments or projects will you use the real estate template for? Is it for a single family home, multi-unit apartment building, new construction project, or land use and leasing such as a parking lot? There are big differences in the data that needs to be collected and how it should be placed in the Excel template, depending on the nature of your project. At a high level, residential real estate investments require analysis of occupancy, number of units, interior and exterior attributes, and tax information. Commercial real estate investments require more analysis of funding sources such as local government subsidies, drive-by traffic, tenant contractual terms such as triple net leases, and project financing schedules.

You should consider how the Excel real estate template will be used by the person analyzing the investment or project. Is it for gathering basic information like tenants, building condition, number of bedrooms and bathrooms, and the like? Or is it more of a quantitative cash flow analysis tool where you intend to plug in some base financial information and project cash flows over time with some factors? A data-gathering tool should be laid out in a simple way where the user can quickly tab through cells to enter the data. It should also be easy to capture the data in a database for future analysis. On the other hand, a quantitative calculation template should be focused on capturing the input data and factor multipliers then extrapolating future cash flows with accurate formulas and charts.

How automated do you want the real estate template? There are several ways to automate Excel spreadsheets including formulas, drop down lists, and VBA macro code. Automation is needed if you will be repeatedly using the template and you want to cut down the time it takes to do time consuming operations like generating reports, calculating cash flows, exporting data, and selecting tax scenarios. Nearly every spreadsheet should have formulas built in that do the basic calculations. Drop down lists help with populating cells and variables if there are a defined list of options. VBA macro code is significantly more complex and often requires some specialized knowledge, but it can accomplish things like cleansing data and running sensitivity analyses that take a lot of time if done manually, or exceed the ability of Excel to do using formulas.

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