Real estate & rental
Real Estate Agent Deal Profit Calculator
Works profit on a single transaction, where the direct costs decide whether it was worth it.
Result
Gross profit is what is left after the cost of doing the job. Overhead comes out of that: the building, the office wages, the vans, insurance, software and advertising. A healthy gross margin still loses money if overhead is larger.
Get a Free Business AuditHow the calculation works
Net compensation on the transaction less the direct costs it required: marketing, photography, staging contributions, signage, open houses, mileage and the hours spent. Done per transaction it reveals which kinds of work actually pay, which an annual total cannot.
What moves the number
- Direct marketing and presentation costs for that property.
- Hours invested, including unsuccessful showings.
- Price point against the effort required.
- Whether the transaction closed on the first attempt.
Where this one goes wrong
A transaction that required months of showings, two failed contracts and a price reduction can net less per hour than a straightforward one at half the price, and the only way to see that is to track hours and direct costs per transaction. Agents who do it generally change what they take on. Unsuccessful work also belongs somewhere, since the expired listings and the buyers who never bought consumed real cost that the closed transactions have to carry.
Before you quote
- Track direct costs and hours per transaction.
- Allocate the cost of unsuccessful work to the closings.
- Compare net per hour, not net per transaction.
Questions
About this calculator
What makes a transaction unprofitable?
Hours, mostly. One that required months of showings, failed contracts and a price reduction can net less per hour than a straightforward transaction at half the price, and only tracking hours and direct costs per deal makes that visible.
Where does unsuccessful work belong?
Allocated to the closings, since expired listings and buyers who never purchased consumed real cost that the completed transactions have to carry. Leaving it out makes every closed deal look better than the business actually performs.
What should the comparison be?
Net per hour rather than net per transaction, because hours are the constraint. Agents who measure it generally change what they take on, which is the useful outcome of the calculation rather than the figure itself.
The formula
gross profit = revenue - direct costs
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How to use this calculator
- Revenue ($). Enter your own figure; the page starts at $38,000.
- Direct labour ($). Enter your own figure; the page starts at $16,000.
- Marketing, staging and photography ($). Enter your own figure; the page starts at $11,000.
- Other direct costs ($). Enter your own figure; the page starts at $2,200.
The result updates as you type, so you can try a figure, see what it does to gross profit, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Revenue | $38,000 |
| Direct labour | $16,000 |
| Marketing, staging and photography | $11,000 |
| Other direct costs | $2,200 |
What comes out
| Result | Value |
|---|---|
| Gross profit main result | $8,800 |
| Gross margin | 23.2% |
| Total direct cost | $29,200 |
| Profit per working day | $400 |
That is $8,800 at a 23.2% margin, about $400 for every working day. Overhead still has to come out of it.
How sensitive the answer is
Holding everything else steady and changing only revenue, this is what happens to gross profit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Revenue ($) | Gross profit |
|---|---|
| $19,000 | -$10,200 |
| $28,500 | -$700 |
| $38,000 example above | $8,800 |
| $57,000 | $27,800 |
| $76,000 | $46,800 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Revenue ($)
- A money amount, starting at $38,000.
- Direct labour ($)
- A money amount, starting at $16,000.
- Marketing, staging and photography ($)
- A money amount, starting at $11,000.
- Other direct costs ($)
- A money amount, starting at $2,200.
What the results tell you
| Result | What it is |
|---|---|
| Gross profit | The headline result. A money figure. |
| Gross margin | A percentage. |
| Total direct cost | A money figure. |
| Profit per working day | A money figure. |
What is not in this number
Property figures here exclude the costs that decide whether a deal works: vacancy, maintenance, management, capital expenditure and the transaction costs at both ends. A return that looks strong before those frequently does not survive them.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.