When to use this model
Use BTR for residential projects held for rental income. Revenue is gross rent less operating costs, with a terminal value on exit.
What is different from BTS
- No per-unit sales. Revenue is monthly rent.
- An operating cost ratio applies to rental income.
- Terminal value is set by a cap rate on stabilised net operating income.
What outputs to read
Equity IRR is the headline. Yield on cost and stabilised NOI also matter for refinance decisions.