The purchase price (as a historical basis) is not enough to continually drive performance. The costs that increase the value of the property, even if they are or were paid at the expense of ongoing costs or the cash flow, are absolutely essential for benchmarking the investment costs when the property is sold, even if the location, the condition of the property, the market and the rental income dictate the price. Such costs that are paid at the expense of the current account are often merely calculated on the basis of mental arithmetic, not financial mathematics. The correct approach is to show the costs in the investment analysis. This is where controlling comes in. Incomplete investment analyses do not disclose a risk position either. Risk monitoring is advisable to prevent such situations.

Print / Share: