ROI Model
How to compare cashflow, capital binding and operating model across markets.
Finance ROI
Executive Summary
- The Genova ROI model must be conservative, evidence-led, and net of management, platforms, cleaning economics, city tax workflow, taxes, repairs, vacancy, and reserves.
- Headline gross yield is not a decision signal. The buy case must still work after downside occupancy and unexpected capex.
- Use three scenarios for every candidate: base, downside, and stress. If the stress case threatens liquidity, the asset is too fragile for P1.
P1 Insight
P1 Insight. The right Genova asset should win because capital at risk is controlled and operations are simple, not because a spreadsheet assumes heroic ADR.
Required model inputs
- Acquisition: price, agency fee, notary, registration/VAT assumption, bank/FX costs, immediate capex, furnishing replacement.
- Revenue: ADR, occupancy, seasonality, platform mix, cleaning fee policy, minimum stay, medium-term fallback rent.
- Costs: management, platform fees, cleaning net cost, linen, utilities, internet, condominium charges, insurance, maintenance, tax/accounting, reserves.
- Compliance: AAUT/CITRA/CIN setup, imposta di soggiorno collection/remittance, operator reporting tasks.
Scenario table
| Scenario | Purpose | Use in decision |
|---|---|---|
| Base | Reasonable case after operator feedback and comparable evidence. | Must produce acceptable net yield without ignoring reserves. |
| Downside | Lower occupancy/ADR, higher repairs, slower ramp-up. | Must remain cash-manageable. |
| Stress | STR restriction, major works, weak season, or operator failure. | Must not break P1 liquidity rules. |
Break-even thresholds
- Calculate occupancy needed to cover fixed costs plus reserves.
- Calculate ADR needed at conservative occupancy.
- Calculate maximum all-in capital allowed for target net return.
- Compare with Break-even Calculator, ROI Calculator, and Cashflow Stress Test.
ROI red flags
- Model excludes condominium extraordinary works or first-year catch-up capex.
- Management cost is guessed, not quoted.
- Best-case tourist demand is used for every month.
- No medium-term rental fallback or resale-buyer thesis.
- Tax assumptions are copied from another country or buyer profile.
Sources
- Comune di Genova IDS for city-tax obligations; Regione Liguria AAUT/CITRA/CIN for tourist-apartment registration; Agenzia delle Entrate for purchase-tax guidance to verify with the notary.