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KPI for Measuring of Rent arrears as a % of rent due posted in category Real Estate

WinningKPI - Real Estate - KPI for Measuring of Rent arrears as a % of rent due posted in category Real Estate Oana Boteanu This KPI is for measuring the rent arrears as a % of rent due. Rent arrears stand for the amount of rent not paid on time to the landlord (or agency). The KPI is calculated by dividing the total rent arrears by the total amount of rent due.
It is in the landlord's (or agency's) interest to minimise this %, and certain practices may be put in place for this. For instance, if the landlord has a high rent arrears %, they may choose to apply fee charges for late rent payment, terminate the contract or take legal action.
This KPI is very important in the real estate industry, as rent arrears can represent a high cost and profit loss for the landlords, or real estate companies. The measures for minimizing rent arrears should be strategically planned and included in the tenancy contracts, that will give the real estate agent legal bounds to control this.

Formula:
Total rent arrears / Total rent due x100

KPI Units: %

KPI Time Frame: update monthly or quarterly

Posted by Oana Boteanu | Help to protect community: Flag for moderation

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KPI Expert Example:

An agency is measuring the total amount of rent arrears as a % of rent due, over a 3 months period.This information would be used to then contact the tenants and take action in order to ensure the rent will be paid.

The formula is calculated as below:
Total rent arrears / Total rent due x100

Total rent arrears: $2000
Total rent due: $8500

Rent arrears as a % or rent due:
200/8500 x 100 = 23.5 %

The result shows that the rent arrears account for a 23.5 % of total amount of rent due, a slightly high figure.

Oana Boteanu | + | September 13, 2012 at 10:27 am

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