05 A free tool
Renovation return
The premium is not the return. The downtime is in the denominator.
Cash return on cost
Payback
Value created at your cap
How it works
The all-in cost is the check you write plus the rent you never collect: cost + rent × weeks ÷ 4.333
cash return = premium × 12 ÷ all-in cost payback = all-in cost ÷ (premium × 12)
Value created capitalizes the new income and nets the spend: premium × 12 ÷ cap − all-in cost
The trap is quoting return on the invoice. Three weeks down on this unit adds about $740 to an $8,500 job, and a program that slips to six weeks per unit has quietly cut its own return by a tenth before the first premium is collected.