Term:Proforma

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A proforma is a document that is developed by a real estate company that helps to analyze the details of a project. A proforma is typically prepared via a spreadsheet or a document. It includes some of the below details:

  • Design costs
  • Construction Costs
  • Permitting Costs
  • Land purchase costs
  • Financing costs (loan interest rates)

It analyzes those against the income that will be produced from the property including:

  • Land appreciation or depreciation (increase in the value of your land)
  • Rental income
  • Sale of property income
  • Rental of space or amenities

The proforma takes the above inputs (and many more) and helps to understand the return on any investment.