Buy, renovate and sell: How we calculate
Build a full buy-renovate-sell budget including time, financing and an optional tax case.
How we calculate
Net profit is sale price less purchase, acquisition, works, contingency, holding, finance, selling costs and the selected tax estimate. Interest and carrying costs are not automatically deducted from the tax basis. Financing cost = loan amount × annual rate × months / 12; the principal stays constant rather than amortising. Annualised return converts one project outcome and does not promise a repeatable annual return. Break-even sale price excludes tax. Profit on your invested cash (ROI) = net profit / your cash invested before the sale × 100%. The financing amount is subtracted when calculating your invested cash; the denominator is not the full purchase price.
What the figures mean
- Total return on investment (ROI)
Profit divided by the invested amount. The figure covers the selected period; it is not automatically an annual return.
Simple example: €100 invested and €20 profit give a total return of 20%.
Example: purchase, renovation and resale
Purchase price is €100,000, acquisition costs are €2,000 and renovation costs are €10,000. The renovation contingency is 10%, or €1,000. There is no loan. The holding period is three months, with carrying costs of €200 per month, or €600 in total. Sale price is €130,000 and selling costs are 2%, or €2,600; other selling costs are zero and tax mode is off.
Total project cost before tax is 100,000 + 2,000 + 10,000 + 1,000 + 600 + 2,600 = €116,200. Profit before tax is 130,000 − 116,200 = €13,800.
Check costs and timing
Selling cost percentage applies to sale price, while the renovation contingency applies to the renovation budget. A longer holding period increases monthly costs and, with a loan, interest costs. Tax mode being off in this example does not mean a real transaction is tax exempt; tax treatment needs a separate assessment.