Sensitivity Analysis

A sensitivity analysis chart in Excel is a tool used to visualize how changes in certain input variables can impact the outcome of a real estate analysis or financial model. The chart shows how the outcome of the analysis changes as the input variables are varied over a range of values.

For example, a sensitivity analysis chart in Excel for a real estate investment property might show how the property's net operating income (NOI) changes as the property's vacancy rate and rental rate are varied. The chart would allow the user to see how the NOI changes at different vacancy and rental rates, and identify the optimal range of values for these variables.

Another example of a sensitivity analysis chart in Excel for real estate might be used to analyze the impact of changes in interest rates on the value of a mortgage-backed security. The chart would show how the security's value changes as interest rates vary, allowing the user to see how the value is affected by changes in the interest rate environment.

Overall, sensitivity analysis charts in Excel are useful tools for real estate professionals and investors to understand how changes in input variables can impact the outcome of a real estate analysis or financial model.