Estimated loss of rent
What is it?
The key figure shows the estimated loss of rent, in crowns. It is an important metric for assessing the property's revenue and operating efficiency.
A small loss of rent indicates that the property is quickly filled with new tenants and thus minimizes revenue losses due to vacancy. Conversely, a long average number of days may signal problems with finding new tenants or other challenges in property management.
How is it calculated?
Estimated loss of rent = (Number of days unrented for rental object) * (annual rent / 365)
* Annual rent includes only the base rent (and is calculated from the rental object lines).
Why is it important to follow?
Following the key figure "Estimated loss of rent" is important for several reasons:
Financial planning: It provides the organization with insights into the potential loss of income as a result of non-leased properties. It is valuable for planning and allocating financial resources.
Budgeting: Information about the estimated rent loss helps to include and allocate these costs in budgets and financial plans.
Risk management: By predicting and managing potential rental lapses, the organization can take steps to minimize losses and improve occupancy rates.
Decision making: It is useful for making decisions about marketing strategies, pricing and maintenance measures to make the properties more attractive to tenants.
Accountability: Following the KPI helps the organization be transparent and accountable to internal and external stakeholders by clearly communicating and predicting financial impacts.
In summary, the key figure provides the organization with information on potential losses and financial impacts due to vacant rental properties. It enables financial planning, risk management and decision-making to optimize the rental of properties and the property portfolio.
Created by Homepal
1/23/2024
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