Growth comes at a cost. Salaries, lead generation, marketing costs and referral fees just to name a few. To keep an eye out on how much we are spending on growth we would normally add all these together and express them as a percentage of the business asset. e.g. if a property was worth $3,500 to us as an asset and it costs us $1,000 in expenses to acquire it, our acquisition cost is 28.5%. Every business has a ceiling on what this figure might be. I know some owners are prepared to push this to 50% as it is still half the price of buying a rentroll.
In business, it is crucial to know how much our new business is costing us per property. How much are your acquisition costs?