DNPI / Methodology
Property investment return methodology
One calculation basis for acquisition, renovation, rent and sale: project cash flow first, investor outcome under the agreement second.
Methodology updated 16 October 2026 · DNPI Capital editorial team
Publisher: DNPI CAPITAL S.L. · registry details and responsibility
Calculation principle
Return is not simply sale price minus purchase price. We first assemble the complete project budget, timeframe and exit scenario, then deduct DNPI’s fee under the agreement. Every input needs a source: agreement, tax calculation, quote, invoice, statement or comparable evidence.
| Metric | Formula | Purpose |
|---|---|---|
| Pre-sale capital K | purchase + acquisition tax + transaction + works + finance + holding + other entered costs | Calculator ROI base; excludes selling costs S |
| Gross profit | exit − purchase − direct works | Quick filter, not the final result |
| Project result before tax P | sale price V − K − selling costs S | Scenario before profit tax and DNPI’s fee |
| Project ROI | P / K | Whole-period return on capital invested before sale |
| Simplified annualisation | (1 + ROI)^(12 / months) − 1 | Only for one initial investment and one final payment |
| Break-even price | K / (1 − s), where S = s × V | Selling costs are counted once; s is a share of sale price |
Costs included
- Purchase price and applicable tax base.
- ITP or VAT and AJD depending on the asset and transaction.
- Notary, registry, legal and technical due diligence.
- Design, licences, works, furnishing and contingency.
- IBI, community fees, insurance, utilities and security.
- Interest, bank charges and the time cost of capital.
- Marketing, agency, tax and completion costs on exit.
Three required scenarios
The base case uses evidenced costs, a workable timetable and comparable exits. The conservative case reduces the exit price, extends the timetable and adds contingency. The favourable case shows upside but must not justify an excessive entry price.
Investor outcome
All agreed costs are deducted from the sale first and the project profit is determined. DNPI’s fee is then calculated as 50% of positive profit; the other half stays with the investor. That is half of the profit, not half of the sale price. Costs, taxes and any top-up to 10% from the fee must be defined in the project documents.
Quality control
We check units, VAT treatment, dates, duplicated costs and comparable evidence. Another professional should be able to reproduce the result from the same documents. Use the DNPI calculator for an initial comparison and the investment analysis for a specific asset.
This methodology is not a promise of return. Tax and contractual outcomes must be confirmed for each investor and transaction.
Capital, timing and actual cash flows
K represents costs before sale, not automatically the investor’s own money. The calculator assumes the investor funds all of K. Where debt is involved, prepare a separate debt and payment schedule; confirm profit and the investor’s ROI base against the agreement.
Annualisation is not IRR. Several contribution and payment dates require IRR/XIRR based on dated cash flows. Some flow patterns may not produce a unique meaningful result. Include taxes, interest and fees at the stated model level: “before tax” cannot be labelled net after-tax income.
The 12 public investor questions help gather inputs. The Sitges and Compte de Urgel cases identify costs and dates not provided in their public figures.
Reproducible educational example
Educational scenario dated 16 October 2026. This is an arithmetic example, not a DNPI asset, realised return or forecast. To reproduce it enter a €420,000.00 purchase, €140,000.00 works including VAT, €18,000.00 additional costs, a €770,000.00 sale and 18 months. Select “Custom rate”, 10%, and zero additional tax value: the resulting €42,000.00 is an input assumption, not a determination of the tax due.
| Measure | Reconciliation | Result |
|---|---|---|
| Pre-sale capital K | 420,000 + 140,000 + 42,000 + 18,000 | €620,000.00 |
| Selling costs S | 770,000 × 3% | €23,100.00 |
| Total costs K + S | 620,000 + 23,100 | €643,100.00 |
| Project profit before tax P | 770,000 − 643,100 | €126,900.00 |
| Project ROI over the full period | 126,900 / 620,000 | 20.47% |
| Investor after DNPI’s 50% fee | 126,900 × 50% | €63,450.00 |
| Investor ROI before tax | 63,450 / 620,000 | 10.23% |
| Break-even sale price | 620,000 / (1 − 3%) | €639,175.26 |
The investor is assumed to fund all of K, additional costs are a combined input, and DNPI’s fee is 50% of positive profit. Personal taxes, actual settlements and contractual compensation are excluded. The sale commission is already in S and must not be counted twice. Under a different financing structure, investor ROI uses that investor’s own actual capital.
If the sale price falls 10% to €693,000.00, with other costs unchanged, project profit becomes €52,210.00. Delay only changes absolute profit when extra holding or financing costs are entered; it changes the annualised measure in all cases. The methodology explains the limitations.
Frequently asked questions
How is ROI different from annualised return?
ROI measures the whole project. Annualised return converts it to a comparable yearly period based on actual duration.
Is an asking price enough to support the exit?
No. It is the seller’s expectation; the model needs comparable assets, adjustments and, where available, completed transactions.
Can profit be calculated before every invoice is available?
A scenario can be produced, but not a confirmed result. Missing costs must remain assumptions or contingency.
