Predicting revenue for real estate business
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PREDICTING REVENUE FOR REAL ESTATE BUSINESS
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Transcript of Predicting revenue for real estate business
In this presentation, we discuss KPIs that can help predict the potential revenue stream for a real estate business.
Choosing Key Metrics: Revenue
The customer acquisition system
For a real estate business to consistently make money, the market
has to be conducive to selling properties or renting (depending on
which you focus on).
Customer retention system
Customer relationships in real estate business is very important: That is if
you want to retain good tenants
There are 2 systems required to accurately predict revenue
#1) The Target Market Size
Customer Acquisition KPIs Real estate is very market
specific
Even within the same city, different
localities have different statistics
So you really need to
understand the statistics for the neighborhood
you are investing in
#2) The Market Reach
Once you have defined your market size, you have to determine how you will reach your target market
Customer Acquisition KPIs
#3 Response Rate
As a real estate business person, you only have so much vacancies at a time and you do not need a lot of people responding to your advertising efforts
Customer Acquisition KPIs
#4 Conversion Rate
These are the people that actually sign a lease with you. Let us say 10 people responded to your market reach effort, of those 10 only 2 will sign a lease with you (provided they pass your screening process)
Customer Acquisition KPIs
#5 Price
In real estate, the price your charge is mostly determined by the market. If the average rent in your area for the kind of property you rent is $750, then probability is your rent will fall within 5% of the average rent
Customer Acquisition KPIs
Customer Retention KPICustomer relationships in real estate business are very important. That is if you want to retain good tenants
Retention activities could be sending Christmas baskets, birthday cards for members of the family, taking care of
their needs when they call, being a concerned landlord, taking care of your
property, etc.
The higher your retention, the less efforts you need to put into your acquisition
efforts.
To compute your tenant retention rate
(Number of tenants at end of period – New tenants acquired during the period)/Number of tenants at
start of period
Read more
Operating a real estate business is very like operating any other business, you have to be concerned with the same factors regular businesses are concerned with even though you use different terminologies
Email: [email protected]
Phone: (417) 812-5945
www.mybusinesskpi.com
www.mybusinesskpi.com/PredictingRevenueForRealEstateBusiness.html
