Yanzi Valley of Jingcheng

Chapter 240 Reality is very skinny

Why is reducing operating costs so important?

Because what Shangnuo said is correct, the income and cost structure of long-term rental apartment companies is basically as follows:

1. 70% of the housing cost;

2. 15% of the decoration cost;

3. 10% of operating cost;

4. Tax cost 5%.

The sum of the four items is exactly 100%. It is difficult to make money, and if you are not careful, you will lose money.

The acquisition cost of Yanzigu Apartment is also 70%, that is, the rental cost of Guansha’s housing stock is 7% of the market price, and the lease signed with the landlord is about 5 years, and the decoration and home appliances are all included.

"5% of the tax cost can't be saved. If you want to get extra income, you have to start from the decoration cost and operating cost." Guan Sha was discussing with Shen Li at that time.

Shen Li suddenly realized, "No wonder there was a long-term rental apartment before, in order to pay for the decoration fee, using inferior materials, and the formaldehyde exceeded the standard."

"Well, we definitely don't do this. Once it is found out and it hits the news, don't do the whole business." Guan Sha said.

Because of this, Guan Sha uses environmentally friendly materials for decoration, so the price is not cheap. When Guan Sha stared at the cost accounting sheet, her head would explode.

Because in the first year of the apartment’s operation, Guan Sha’s decoration cost accounted for 25% of her total income for a rough house with one bedroom and one living room like Uncle Lei, the village chief. , the decoration cost is 14%, 8% for three bedrooms and one living room, and 5% for four bedrooms and one living room. This is a horizontal comparison of the proportion of decoration costs of different room types.

From the results, the more the number of rooms, the lower the proportion of decoration cost to the total income. This is because the number of tenants will increase with the increase of the number of rooms, but the price of a single room of a large apartment will decrease for a house of a smaller size. The income is not obvious, so the profit of renting out the whole four-bedroom and one living room and then subletting it out is the highest.

Guan Sha found that with the extension of the company's operating life, the advantages of operating a multi-room house are very obvious.

If we make a longitudinal comparison of a single room type in different years, in terms of decoration costs alone, if the company rents out a well-decorated house with one bedroom and one living room, the decoration cost will account for 25% of the total income in the first year, and in the second year and the previous year. In the next few years, because there is no need to redecorate, but the income is still increasing, the proportion of decoration costs will drop to 12%. The third year will continue to decline, and the proportion will be 8% after equalization. The fourth year is 6%, and the fifth year That's 5%.

This is the worst case, because it is assumed that all of Guansha's houses are one bedroom and one living room.

The average five-year renovation cost of a two-bedroom house is about 3.88%, that of a three-bedroom house is 2.94%, and that of a four-bedroom house is directly reduced to 2.66%.

When Guan Sha calculated, the decoration cost included home appliances, and also took into account the fact that the decoration cost would increase with the increase of the house area.

Of course, there is a premise for this calculation, that is, there is no need to redecorate the house within 5 years, and there is no need to re-purchase home appliances, and the house with more than two bedrooms and one living room cannot be a rough house.

After Guan Sha made this calculation sheet, Shen Li also looked at it, and she said, "The one with four bedrooms and one living room earns more money."

"Yeah." Guan Sha agreed, "But it's not realistic."

"Yes, it's unrealistic." Shen Li said helplessly.

Shen Li and Guan Sha have been running the market for so long, and she has a rough idea of ​​what the market is like.

First, there are not so many houses with four bedrooms and one living room in the core areas of the market, and there are relatively few houses with three bedrooms and one living room. Because of the large population in Qingyang, developers have designed more two-bedroom houses when building houses. One room or one room.

Second, although the four-bedroom and one-living room has a large price difference and high profits, it also requires higher cleaning and home appliance costs.

Third, a house with four bedrooms and one living room is not as easy to rent out as a house with one bedroom and one living room.The reason is very simple. One bedroom and one living room are exclusive to the individual. Even if the hall is separated, only one roommate needs to be tolerated. However, four bedrooms and one living room may have to get along with four roommates, and the shared area of ​​the common area is smaller, so this kind of House type is not the first choice for single tenants.

In other words, if Guan Shatu only manages large-scale houses for profit, it is likely to cause a drop in the occupancy rate. Ren Tianxing has presented a research report to Guan Sha before, even if the cost of acquiring a house is 5.5% off, the occupancy rate will only drop. If it breaks 65%, don't even think about making money, let alone Guan Sha's current 7% off housing cost.

Therefore, the indicator of occupancy rate must not be sacrificed by Guansha.

To keep the occupancy rate, Guan Sha has to operate a small apartment, which is evenly exposed to rain and dew. If she wants to increase the profit margin on this basis, she can only try to find some newer houses, preferably non-rough houses that have been simply decorated, so that The decoration fee can save a few more copper plates.

"Sister Shen Li, we can only dig as many large-scale houses as possible, but we can't dig too many, otherwise the occupancy rate may drop."

"How about an average?" Shen Li said, "We now account for 70% of the one-bedroom and one-bedroom and two-bedroom one-living rooms. What if we find a way to reduce it to 60%?"

"I think this is fine."

Guan Sha recalculated the cost again. If one bedroom and one living room and two bedrooms and one living room each accounted for 30%, and three bedrooms and one living room and four bedrooms and one living room each accounted for 20%, the average cost of decoration and home appliances in five years would be 5%, is a very gratifying figure.

Guan Sha roughly told Shang Nuo about this figure. She said it was 4%, but Shang Nuo immediately denied it. Ask for money."

"The loss of furniture and home appliances is unpredictable, and maintenance depends on the situation. Fixed expenses such as cleaning fees do have to be considered. Of course, the cleaning fee for four bedrooms and one living room is much more expensive than that for one bedroom and one living room, but the profit is still good. I also count Pass……"

Guan Sha turned on the computer in front of Shang Nuo while speaking, but the computer screen was not facing Shang Nuo, but facing herself.

Guan Sha searched for data in the Excel table full of numbers.

"5.69%!" Guan Sha said, "It's almost 6%!"

"Does the 6% include cleaning?" Shang Nuo asked.

"Well, this figure includes decoration, home appliances and cleaning. It has been in operation for 5 years, which is equivalent to dividing the total cost of the 5-year area by the proportion of total revenue." Guan Sha said.

Shang Nuo lowered his head and pondered for a while, "But the three-bedroom and four-bedroom accounted for 40%, is it too optimistic?"

Guan Sha smiled embarrassingly, "It's true that I'm a little optimistic, but I've counted those who are not optimistic! If we can't optimize the housing structure, according to the current situation of Yanzigu apartments, one bedroom and one living room account for 45%. Two bedrooms and one living room accounted for 35%, three bedrooms 15%, four bedrooms 5%, and the calculated figure was 6.43%, which is still acceptable.”

"Yeah." Shang Nuo was thoughtful, "But we have to count..."

"I know that if you add in the 5% vacancy rate, it means that the total income for five years is only 95% in theory, but the fixed expenses have already been paid, so if you add this loss, the proportion of fixed expenses will increase to 6.77%, if we optimize the housing structure in the future and rent more large-sized houses, the number will definitely be more optimistic than this.”

Shang Nuo nodded, "You are really hardworking! But you are assuming that the occupancy rate can always be maintained above 95%. If you continue to expand in the future and have more houses, this number may drop. If it drops to 65% %, which is the life-and-death line you mentioned before, in fact, the proportion of fixed costs will increase to about 10%...and if you include maintenance and home appliance loss..."

Guan Sha smiled awkwardly, "So I hired an accountant, and of course a legal counselor, who specializes in dealing with company reports and contract issues, adding up and down, without optimizing the structure of housing resources or further expansion Based on the calculation, the calculated fixed cost ratio is about 11.13%, which is almost 15 points lower than the 4% you mentioned."

"Uh... 4 points, are you assuming that the rental income will increase every year?" Shang Nuo asked.

"Yes, but the country stipulates that the increase cannot exceed 5% per year, so we calculate it at 4%."

"Well, in this way, it is indeed possible to increase 4 points per year, but in fact it is still... It is still difficult to make money." Shang Nuo came to a conclusion.

"No no!" Guan Sha smiled slyly, "I have a new idea, we can also start from the operating cost, have you heard of Jinling Shoes?"

Shang Nuo was startled, "Golden Collar Shoes?"

(End of this chapter)