Top Ten Real Estate Performance Metrics For Your Property Scorecard

October 24, 2009 · Posted in Real Estate Investment analysis · Comments Off 

Today we are in an enviable position with the technology resources available to us that allow collection and almost instantaneous data manipulation and presentation for management. We are now in a position of tracking metrics for our property scorecard that a few short years ago were simply not possible. Unfortunately this massive information collection capacity leads to other problems such as information overload and developing a true understanding of what the metrics are telling us. Ensuring that real estate managers are developing real skill to unleash the potential that metrics and a property scorecard gives them is still an issue, not only using the scorecard to track performance but to use the KPI’s to forecast business health and prescribe solutions for problems diagnosed.

So, without any further ado, here are the top ten real estate metrics for your property scorecard:

1. Net Advertising Expense – this measures the total advertising expense less fees from vendors and this metric should always be negative i.e vendor fees are greater than the expense. Good agents tend to spend more on advertising and earn more back than poorer performing agents.
2. Salary Cost per Employee – this will track your team cost and highlight poor return on investment teams for attention
3. Operating Surplus – typically measured as the surplus funds after all capital and operating expenses that are available for return to the owner
4. Operating Surplus per Principal – this is a good indicator of the relative performance of one branch or team against another
5. Sales Revenue per Sales Person – tracks the relative success of a sales person
6. Sales per Sales Person – tracks the work rate of a sales agent
7. Average Fee per Sale – helpful for tracking the direction of your business in terms of the market sector you are targeting, ideally you want to see an upward trend in this metric
8. Management Fees per Property Manager – a metric to track and compare letting and /or property managers against each other
9. Tenancies Managed per Property Manager – indicates the work rate of each property manager Read more

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Property Valuation

October 9, 2009 · Posted in Real Estate Investment analysis · Comments Off 

In the property investment industry, South Africa follows a unique system where every plot is reflected on a diagram and ownership of the plot is recorded in the relevant Deeds Registry, available for public viewing. South Africa is known to have one of the best deeds registration systems in the world with an exceptional degree of accuracy and security because of the influx in property investing in the country. Property can be owned individually, jointly or by a corporation or company registered within or outside of South Africa.

So why is the property market dropping so drastically?
With the amended National Credit Act (NCA) that came into force on the 1st June 2007, the property industry evolved into a wall of stability that is completely necessary in a country like South Africa. Despite the scores of speculation and the horror stories you might’ve heard about the NCA regarding home loans, the amendments would not have been approved if there were possibilities of failure for South Africa’s citizens. So to set everyone’s mind at ease, the NCA will not impact on the time period needed to grant or reject home loan approvals; though no one can guarantee the impact that the NCA will have on the property market, those stories are all just a classic taste of sensationalism.

Yes, the NCA has definitely altered the way banks and financial institutions operate when considering an approval for a home loan or bond, but the municipality is almost certain that these types of loans will hardly be affected by the amended NCA. The NCA is to put an end to “reckless money lending” thus protecting individuals from getting in way over their heads by borrowing money from the bank which they cannot afford to repay. This way, individuals will be guarded against hefty monthly bond repayments; the NCA will see that they are comfortable paying a mortgage loan that their paycheque can be accustomed to while also preventing them from debt-drowning.

The Nelson Mandela Bay valuation
A recent case study depicts how the NCA has already impacted on property valuation. Read more

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True Value is in the Eye of the Beholder – Property Valuation Advice

December 4, 2007 · Posted in Real Estate Investment analysis · Comments Off 

There are few more emotive issues than the estimated value of your own property.

Anyone who has been or is intending to remortgage in the foreseeable future will be aware that an independent valuation will need to be completed in most cases. In the current property market, this can be a harrowing and eye opening experience. It has become increasingly evident that property valuers have been taking a very lean view of the UK property market and this has significant implications for seller, purchasers, remortgagers and, most importantly, mortgage brokers and IFAs.

According to London-based data services company Hometrack, which delivers a good indication of a property’s value, house prices fell for 18 consecutive months up to December last year, when the average house price in the UK climbed just 0.1 per cent.

For most areas, last year provided the poorest house price growth Read more

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