There are 120 Rental Income categories. Each one is spread over three separate lines to provide flexibility for most types of development. You can re-title them as required (notice that re-titling any one entry will apply the same title to all three related lines). The 3 components that make up each rental value are: (1) Number of Units, (2) Area per Unit and (3) Rent per Unit.
Normally Rent is treated as Income per Annum although this can be changed to Income per Month (used in certain European countries). Notice that the description for each income line (the middle column) in the Data List will display the suffix '-PA' or '-PM' indicating whether it is respectively annual or monthly. The default setting is Income per Annum.
For example, 32,000 sq ft of Offices at £20 per sq ft is entered as 1 Unit of 32000 Area at a Rate of 20.
To specify a total rent figure then enter as 1 Unit with an Area of 1 and provide the total rent figure as the Rate. For example if you have a known rent of £250,000 then enter it as 1 unit of 1 sq ft at a rate of 250000. Prodev will recognise that the unit and area components are not relevant and exclude them from the report.
The number of units entry is only useful in cases where a number of identical types of unit are being let, for example 10 units of 950 sq ft each. Where entered as 10 units at 950 sq ft, Prodev will simply multiply these two numbers together to give a total lettable area of 9,500 sq ft. This entry is seldom used so, where not required, it is recommended that you leave the number of units entry set at its default value of 1.
Whenever the cursor is in the Rents Section you can use the ‘Units’ button to change the type of rental unit. Select the appropriate unit type from the drop down that displays in the top right hand corner of the screen. Note: If you select Sq Feet, Sq Metres or Plots then all three lines are used in the calculation. In other cases (Units and Car Spaces) only the first and third lines are multiplied together because the area component is not relevant to the calculation. Always take care to check this is set up correctly otherwise you could incorrectly calculate rents. A more detailed description of how the ‘Units’ button works is provided in the section ‘Data List Commands’.
The Unit command also allows you to specify Income as being a Rate per Month (used in certain European countries). The default setting is Rate per Annum. If you change from annual to monthly rent (or vice versa) then Prodev will display a reminder message as it is imperative that your rental value is appropriate to the rental frequency chosen. Notice that the description for each income line (the middle column) in the Data List will display the suffix '-PA' or '-PM' indicating whether it is respectively annual or monthly.
Individual Rental categories can be exempted from Letting Fees by using the ‘No-Fee’ button.
Applying Yields to Rents
Rental Income is divided by the yield rate to calculate the capital value. The Yield Rate for each rent is shown by the Yield Number suffix (to the right of the rental value on the screen). You will have presumably already entered any yields that you may wish to use in the previous section (Yields and Deductions) therefore you can now apply them to the rental values as appropriate.
If you are only using one yield in your appraisal then you will have entered it as Yield-A. Notice that all the rents are set by default to pick up on Yield A so you will only have to apply yields to rents when you wish to use (and have already provided) multiple yields.
To do this, highlight the rental value, the item with the letter suffix (normally ‘-A’) and click the ‘Yield’ button. This will display a drop down containing the yields already entered. Double-click on the yield of your choice and the appropriate letter suffix will appear next to the rental value. This indicates which Yield is being used for the rent in question.