The Numbers Cost of a desk: General expenses divided by # producers = $1,800,000 and the office has 4 agents then the cost of a desk is $450,000. In the real estate industry, it is an ideal goal to have your property management fees cover your fixed expenses. In other words, every sale you make is profit. Depending on the marketplace in which you operate and where you are in the maturity of the business will affect this sound financial management metrics. Later in APG you will explore the break even and profit point of your property management business. There are things in the property management side of your business that will affect top line revenue. These include vacancy arrears, management and your ability to assess which property runs at a loss, or that you do not make profit on. Again, in the property management section we will review how you determine these numbers and how you calculate what business is good business. Now we know how to calculate our break even point and our profit point what we should be considering is what the financial endgame with profit is. Raine & Horne corporate consider 20% the benchmark as the minimum you should be aiming for. Large scale businesses with big rent roles that are more mature are likely to achieve in excess of 30% profit point. Assume this agency has 400 managements. The average weekly rental is $700 per week and has an average MF of 6% net MF from this example is $2,190 How many managements would you then need to cover fixed expenses for the entire business? If your fixed costs are $1,800,000 821 36 |
RkJQdWJsaXNoZXIy MTI3ODI1