What is the general break-even point of real estate?

The break-even point of developers with lower cost or better development is generally 70%, and the difference in cost is generally 85%, that is, when the house is sold between 70% and 85%, most developers will recover the cost, and the rest is the profit part.

Linear breakeven calculation formula:

Profit = total sales revenue-total cost

Total sales revenue = sales unit price × quantity

Total cost = fixed cost+variable cost = fixed cost+unit variable cost × quantity

Break-even point refers to finding the quantity or unit price when the profit is zero.

Total sales revenue = total cost

Sales unit price × sales volume = fixed cost+unit variable cost × sales volume

Linear breakeven analysis factors:

I. Analysis of Minimum Rent Price Rent and selling price are the most important uncertain factors of real estate projects. Whether the predetermined rent and price can be reached is usually the key to the success or failure of real estate development investment projects.

Second, the analysis of the minimum rent-to-sale ratio shows that the minimum sales volume and the minimum rental rate are also the most important uncertain factors of real estate projects. Under a certain rent level, whether the ideal quantity can be sold at a predetermined price or the ideal rent level is usually the key to the success or failure of development investment projects.

Third, the highest land purchase price The highest land purchase price refers to the highest land purchase price that can be sustained under the condition that the sales and other expenses of the development project remain unchanged and the expected income level remains unchanged.

Fourth, the greater the gap between the highest project cost and the estimated possible project cost, the greater the ability of the development project to bear the risk of project cost increase.

Verb (abbreviation of verb) The maximum purchase price is very important for real estate investment projects, and the initial purchase price is very important for realizing the expected investment income target.

6. Maximum operating expenses ratio Operating expenses ratio refers to the ratio of operating expenses to total rental income of investment real estate.

Seven. The combination of multi-factor critical point and multiple risk factors changes at the same time, which causes the economic benefit index of the development project to change and reach the critical point. At this time, the combination of the change values of various factors becomes the combination of multi-factor critical points.