How and What to Monitor in Your Real Estate Business

To enjoy your real estate business success, it is imperative to conduct business activity monitoring. Unless you keep an eye on all business activities, you cannot take it to the next level. In the real estate business, you may be involved in a variety of activities. For example, you can have your own property or rental properties to manage. You may be offering services on contractual basis. You may also be involved as an agent or broker in this business and your areas of service might cover buying or selling properties, renting out property and so forth. You may also offer real estate escrow agent services or real estate appraising solutions.Whatever the nature of your services, you need to identify the Key Performance Indicators or KPIs of the business. KPIs determine the success or failure of a business. In simple terms, you can use KPIs as a business activity monitoring tool. KPI is a technical term used by the business fraternity.A real estate business typically comprises two revenue streams; sales and property management. In order to measure the performance of your sales department, you need to take into account the percentage of appraisals that becomes listings, sales percentage of the listings, percentage paid by the client for advertising, percentage of business generated through referrals or old clients and the margin of profit. In order to gauge these, you also need to see how many property transactions were made successfully from the initiated transactions. You need to check the average value of the transactions that are done and compare the number of transactions accomplished by the agency or through auctions. You have to compare the initial listing price with the signing/contract price.There are other also activities that you also have to monitor in the case of sales income. These include; the average selling price of the property in terms of per square meter, value of sold residential properties, number of properties listed in your magazine and average percentage of the discount rates offered to buyers who purchased properties from the agency. Basically, you need to judge sales performance from every angle in order to get accurate estimates for your business.In the area of Property Management, you will again need to identify some of the Key Performance Indicators (KPI). These include but are not limited to; the total number of properties managed, profitability, number of properties handled by each property manager, duration of vacancy and rent arrears. Property management is considered a safe business because it allows you to reasonably accurately predict both income and expenditure.If you want your business to grow and get stronger, you must conduct continuous business activity monitoring and measure these Key Performance Indicators on a regular basis.