When trying to calculate your capital, real estate or labor costs, a labor and material cost (LCM) spreadsheet can help you keep track of these costs in one place. This is the type of spreadsheet that all real estate agents and managers use. It’s a very simple formula.
The first part of the formula, labor cost, shows how much a property’s owner is paying each and every employee. The labor cost is divided by the number of hours worked per week to determine the average wage. The formula for this is the formula: (number of hours worked / number of hours worked per week) / worker’s rate.
Then comes the part that shows how much of the purchase price of the property is spent on materials. This factor is figured out by multiplying the building value by the ratio of a property’s square footage to the size of the lot. Usually the landlord gets a larger share of the property price because of the bigger square footage.
Next comes the final factor that can be used to estimate the total cost of ownership. This is the depreciation expense. The price of a home will generally be higher than the cost of constructing the property. The depreciation rate is figured out by taking the square footage of the lot and dividing it by the area of the lot.
Finally, a final factor is added to the formula. This is the amount of rent paid on the property each year. This rent amount will vary depending on the property’s condition.
The labor cost will show how much is actually paid to an employee. When a property has poor condition or is being marketed to a very specific group of buyers, this labor cost can skyrocket. The calculation of labor and material cost is simply multiplied by the square footage of the lot and divided by the size of the lot.
A labor cost spreadsheet can help a real estate agent or manager keep track of the monthly bills. It will show how much is actually paid to employees and how much is spent on materials. It can be helpful in showing the potential of a property to prospective buyers.
Once a capital and material cost spreadsheet are used by a real estate agent or manager, the financial results can be reported to the client. It can also be used by the manager to understand the financial realities of the business. All of this information is available when using a labor and material cost sheet.