Help with creating an Income Statement and Balance Sheet for a vacation rental proper

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Help with creating an Income Statement and Balance Sheet for a vacation rental proper

Tom Brown
Member since 2023 · 1 post · 0 votes

Hello everyone,

I'm considering investing in a vacation rental property in Spain and I would like to create a projected Income Statement and Balance Sheet for the next 5 years to help me better understand the financial aspects of this investment.

However, I'm not sure where to start and how to properly format these financial statements. I've made some attempts, but I'm not confident that they are correct or complete.

I was hoping that some of you might be able to provide me with some guidance or templates on how to create these statements. Specifically, I would like to know what kind of items I need to include in these statements for a vacation rental property, such as revenue, expenses, assets, and liabilities.

Attached to this post are my current attempts at an Income Statement and Balance Sheet. Any feedback or help would be greatly appreciated. Thank you in advance!

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  • Jeff Nash
    Accountant · McKinney, TX · Member since 2023 · 393 posts · 580 votes
    3y

    I have a few comments - are you able to get any financial information from the existing or previous owner?  If so, did the owner prepare the financials or did a professional? This would provide you with a baseline and offer insight into the categories and amounts to some degree.  If you are investing in a foreign country you have to be aware of of the local rules and regulations and associated costs that might not be applicable or be different than in the US. The basis of accounting could also be different so that is something you would need to be aware of.

    As far as projections go, those will rely heavily on the assumptions you use so you want to make sure they are well supported and reasonable and periodically update for new information and changes in facts and circumstances.  


    As far as that template goes, it does not follow your basic US GAAP labels (or at least looks like it might be for a nonprofit or IFRS).  Do you currently use an accounting or tax professional?  If so reach out to him or her, and if not you might want to engage one for something like this.  It can be hard enough working on domestic matters but when you add foreign issues to the mix it adds another level of complexity.

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  • Erwin Groenendijk
    Investor · Barcelona & Valencia (Spain) · Member since 2017 · 322 posts · 177 votes
    3y

    @Tom Brown I've been quickly going through it and it looks quite solid. Not sure if you are including mortgage payments in your income statements.

    The height of the amounts is more difficult to analyze when you are grouping everything in operational costs for example. 

    Where is the property located? For a purchase price of €200.000 achieving almost €47.000 of expected rental income is not bad at all.

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