19 APARTMENTS IN CANNES

Posted by admin in Property Letters | August 12th 2005

IMPORTANT – please do not be confused.
I have worked the figures below on a global unit of 19 apartments together because YOU can work out proportionally what YOU may face if you went for one smaller apartment, or two, etc. I can’t easily do 19 projections today but you can extract any one you like or any combination and arrive at your own figures with a pocket calculator. (Or ask me to do it and I will forward to you.)

Below is a first stab at some figures, and I like to think that they are calculated on ‘worst case’ (being 40% occupancy). We have been surprised by our bookings for conferences in 2005 and very pleased. Firm orders from whole delegations (in one case numbering 20 apartments) are coming through weekly for all the major conferences next year, and we are realizing that we are going to be very busy.
Our website placement is very high on all search engines now, and our reputation is clearly strengthening.
Our real interest is in catering to business visitors, and we are working to grow that sector as hard as we can.

Some figures :

Income :

52weeks 21 weeks Gross
(100%) (40%)
Studios 3, 11, 17 25861 10444 (x3) 31332
Studio 36 29374 11851 11851
Studio 24, 31 28130 11360 (x2) 22720
Studio 21 26885 10857 10875
Studio 1, 7 24396 9852 (x2) 19704
1 Bedroom 23, 27 32970 13315 (x2) 26630
1 Bedroom 4, 16 31726 12812 (x2) 25624
1 Bedroom 32 35460 14320 14320
1 Bedroom 25, 33 34215 13818 (x2) 27636
2 Bedroom 26 41794 16878 16878
2 Bedroom 15 40549 16376 16376
3 Bedroom 41 46994 18978 18978
Total 19 apartments 242924 242924
Supplementary receipts – Parking 16000
258924

Costs:
(19 apartments)
Electricity 9690
Telephone (office) 1800
ADSL internet access (19 apartments) 5700
Water 7600
Cable TV 19 (apartments) 3500
Insurance, gardening, cleaning 20000
(Common areas)
Administration (25%) 64731
Publicity & marketing 15000 128021

Margin:

258924 – 128021 = 130903

Purchase price. Occ. Receipts. Expenses. Margin. Rentability.
% %
4 830 000 40 258924 128021 130903 2.71
4 830 000 55 356020 152295 203725 4.21
4 830 000 65 420751 168478 252273 5.22

(less 10%)
4 347 000 40 258924 “ “ 3.01
4 347 000 55 356020 4.69
4 347 000 65 420751 5.80

(less 15%)
4 105 500 40 258924 “ “ 3.19
4 105 500 55 356020 4.96
4 105 500 65 420751 6.14

Finance charges are not included. They will of course vary depending on the level of finance granted.
The interest rate we would expect to achieve is about 3.2% p.a. (although we might get lower) over 15 years (maybe 20). Some examples below.

If you borrow 100 000€ at 3.2% over 15 years your monthly repayment will be 700.24€
Over 20 years your monthly repayment will be 564.66€

If we borrowed 50% of 4 347 000€ between us
Over 15 years at 3.2% we would repay 15222€ monthly (182 664€ p.a.)
Over 20 years at 3.2% we would repay 12274€ monthly (147 288€ p.a.)
If we borrowed 70% of 4 347 000€
15 years – 3.2% – 21307€ (255 684€ p.a.)
20 years – 3.2% – 17182€ (206 184€ p.a.)

If we borrowed 50% of 4 105 500€
15 years – 3.2% – 14374€ (172 488€ p.a.)
20 years – 3.2% – 11591€ (139 092€ p.a.)
If we borrowed 70% of 4 105 500€
15 years – 3.2% – 20123€ (241 476€ p.a.)
20 years – 3.2% – 16227€ (194 724€ p.a.)

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