How to evaluate long-term rental apartments?

In recent years, China's long-term rental apartment industry has developed rapidly. Many long-term rental apartment enterprises have reached a certain scale and the degree of branding has been continuously improved. After several rounds of financing, the assets and profitability of some brands have been greatly improved. So how do you value long-term rental apartments?

The valuation of long-term rental apartments is a relatively difficult job, because it involves two types of enterprises, one is centralized and the other is decentralized, and the valuation models are very different.

Let me talk about decentralization first. At present, the large-scale market is mainly decentralized and shared. When participating in decentralized financial analysis, we will encounter many financial audit problems.

First, whether all rents are recognized as income.

Suppose an apartment has 40,000 apartments, which generates 500 million rents every year. If all the income is confirmed, you have to pay 30 million tax. In fact, many apartments have adopted income suspense processing. As a collection and payment, the company's income is only the service price difference income, and the valuation of 2 billion can't support the income of 50 million, let alone the loss!

Second, the scattered short-term cash flow is good, but the profit is extremely low or even non-existent.

Apart from expansion, there is no other high-profit investment in diversified cash flow, so in the long run, it is always difficult for companies to find high profits to combine. The analysis of the cost structure shows that the cost of decentralized house purchase accounts for 65% of the total expenditure, and the labor cost accounts for more than 20% of the income. Coupled with the sharing of decoration, taxes and profits are almost zero.

Third, there is a profit without charter flights?

Decentralized average lease period is 3-4 years. If you don't charter a car, you will only make a profit at a certain stage. Without articles of association, a large number of houses will expire. Without scale, there will be no valuation support.

Fourth, the asset-liability ratio is extremely high.

Decentralized apartments, the main means of financing is to use tenant deposit to play, then use tenant staging, and then use decoration loans. The apartment has been in a state of high debt, and the end of each year is the time to catch the ban!

Fifth, there is a need for continuous financing.

Whether it is debt or equity, decentralized financing is always needed. Of course, after the scale is bigger, financing will directly become the equity capital of the company. The disadvantage is that the founder may become a minority shareholder!

Then, from the perspective of centralized housing, centralized decoration, centralized procurement and centralized management, centralization has obvious management cost advantages.

First, the operating cost and depreciation of the property.

Centralized leasing is of great value, generally during the period of 10- 15. At present, the cost of centralized house purchase accounts for 45%-50% of income. In the short term, it is to expand the scale. According to the five-year renovation of fixed assets, the cost is about 65,438+07%, that is, the centralized operation is good, and the operating gross profit can reach about 40%, reducing the later allocation cost and labor cost. Generally, the total investment can be recovered in four to four and a half years.

Second, the ratio of people to rooms.

From the perspective of the ratio of people to rooms, the labor cost will be further reduced when entering the mature stage. Judging from the three costs of management, centralization is much lower than power.

Third, cash flow and asset securitization.

At the beginning, centralized apartments are prone to negative cash flow, and generally there will be positive cash flow in September-65438+February, so the pressure in the first year is great. In the first three years of centralized apartments, from the financial statements, liabilities or cash flow decreased, but once they did not expand, cash flow and profits suddenly broke out.

Fourth, valuation model and listing.

Other variables can also be added to the company valuation model, such as industry scale, brand influence, resource control, shareholder background, founder experience and so on. These can only be analyzed qualitatively, but they will still have an impact on the final valuation.