Stop focusing on Expenses Many years back, I had this AHA moment In the commercial real estate Our focus usually is to increase Net Operating Income (NOI) Net Operating Income is defined as Income - Operational Expenses Income consists of - Rent income - MIscellenous Income - Utility recoveries Expenses - Operational cost - Insurance and Taxes - Utility expenses In one of my properties, we were trying to save $100 by changing the Waste management schedule. I am asking around what else can I reduce in expenses. Then someone told me to stop focusing on expenses and focus on topline income which is Rent. Over the years, I realized that is so true A small change in rent causes a massive change in NOI as it's multiplied by all the units that we have in the complex. Focus on Rent Income! 💬 What are your thoughts on focusing on income rather than expenses? Share your insights below. 👍 Enjoyed this content? Like, share with your peers or follow me for more tips on commercial real estate. 🔔 Don't forget to subscribe to my newsletter for weekly insights! Let's grow together in our real estate journey.
This post transcends Real Estate and applies to all business models. Focus on Sales and Top line Revenue and the rest can be managed
Great advice! What strategies do you recommend for increasing rent income in a competitive market?
Makes sense!
That is a smart move on your part. How do you determine when it's better to reduce costs versus increasing rent to justify a cost? How do you find the right balance between cutting expenses and raising rent to optimize NOI?