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ESTIMATING CONVERSION & RENTAL COSTS AND BENEFIT
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A Guide to Costs, Impacts, & Overhead of Converting a Basement ADU, for Chicago
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reference contents & interaction key at top of each tab (click + to right of header to expand)
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Calculator Contents
Core Financing Numbers
content
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click on title to go to sheet1
Chi_Construction
Estimates Basement Construction Costs
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2Loan_Terms
Estimates Home-Improvement-Loan Payments (& outstanding mortgage payments)
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Chi_Rental Rates
Estimates Annual Rental Income, based on Area Market & Afforable Rates
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4Chi_Taxes
Estimates Annual Tax Increase, based on Construction Investment & Area Sales Market
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Operational Overhead
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5Chi_Utilities
Estimates Utilities Costs, given common areas & split meters
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Chi_Insurance Admin
Estimates Landlord Insurance, Marketing, & other Admin costs
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Chi_Maintenance
Estimates Routine & Preventative Maintenance, Emergency Reserves
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Cost-Benefit Summation
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8Cost-Benefit Compares Benefits (rent & value appreciation) with Costs (payments, taxes, & overhead) to calculate time to break even on investment, given loan & mortgage terms
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Assumptions, Aim, Locked Calculations
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This spreadsheet helps you consider how to think about a potential basement ABU, from the perspective of a landlord. This includes considering Chicago real-estate, rental markets, and overhead items in calculating long term debts, annual costs, rental income, and appreciating value. Where possible market trends - from 2019, 2020, and 5-10year averages - are incorporated, with references and boxes to update values for future calculations.
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Currently, the calculators above account for maintenance, insurance, outstanding mortgage payments, local utility and tax rates, when helping to estimate your annual cost-benefit balance and total time to break even on your investment. The current cost-benefit and loan sheets assume that loan payments are made at the same time rent income is collected with no gaps and that loan payments start during the first month of the loan.
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The calculator does not account for state or federal tax breaks, subsidies, or discounts, nor for subsidies directed at energy-efficient/sustainable renovations. In addition, the cost-benefit calculator does not include time discount rates in its rough estimates of long-term payments.
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Make sure to look through the full series of calculators before downloading an excel copy. Some sheets link to area stats (from HUD and others); you want to confirm that inputs are calibrated to your area before freezing those values for offline use. Once duplicated or downloaded, all cells are unlocked for additional editing.
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This is a rough estimation tool only, meant to help you consider variations in rental income, costs, and loan terms, in advance of pursuing a project. The results are not guaranteed. Consult with an NHS counselor to refine your understanding of a project's viability and speak to CIC's counselors to develop and revise a property management plan. (Add note on financial process - plans, appraisal, loans, construction/contracting, with on-going property mgmt and repayments.)
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User Interactions and Inputs, Keyed
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Input types & Colors
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1. User checks box or selects from Pull-Down (light blue highlights)
resulting choicenote on use:Side-Bar
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Check for Yes:TRUE
used to add checklist item or pick between 2 options
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Pick your Area:Chicago--Portage Park/Jefferson Park
Chicago--Portage Park/Jefferson Park
used to select from predetermined options, mostly to calibrate for areas/neighborhoods or unit attributes References: Notes on limits of calculator estimate and technical experts to consult for advice/direction.
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2. User adds a number (typically amount of money or value) (red highlights)
resulting choice
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Monthly Rent: $1,400$1,400values from assessment, bills, existing rent, mostly calibrates calculations to your building and existing experience with utilities, taxes, loans
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optional or suggested edits
Exports/Printing: Notes on options to set in advance of exporting from google sheets to excel (desktop use).
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3.A User references additional information, no direct input (orange highlights)
resulting choice
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See Generated Tables for Affordable Monthly Rents.n/aalert panel that highlights additional considerations/concerns, typically in an orange-outlined panel at the end of that page
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Result/Reference types & Colors
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4.A Direct Outcome of Calculation - referenced in on-going calcs (yellow fill)
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$16,800Annual Rental Income (12 x monthly rent)no edits needed from user, should automatically calculate value given input above & internal variables
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4.B Outcome or Linked Variables/Rates dependant on choices - referenced in other tabs (yellow outlines)
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$4,200Anticipated Vacancy Loses (25% of annual rent)no edits needed from user, should automatically calculate value given input above & linked ref. tables
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3.B Linked Variables from Other Tables/Preceeding Calculator Tabs - referenced from other tabs (orange outlines)
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maintenance reserves per unit
$1,680no edits needed from user, should automatically calculate value given input above & linked ref. tables
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4.C Intermediate Calculation for Reference (thin black box outlines)
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for visual tracking of fixed calculations
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$10,920
gross rental income (minus vacancy, maintenance)
no edits needed from user, should automatically calculate value given input above & linked ref. tables
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$910.00
monthly breakdown
use in combination with other types
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