Using the information provided, analyse the case study area of operation.

Referencing Styles : Not Selected 1. Using the information provided, analyse the case study area of operation. You are required to calculate the available commission both in sales and property management. Average sale price of a four bedroom home $450,000 (in the newer areas) Average price of a home (any size) $380,000 in the established older area Average sale price of a one bed unit $160,000 Average sale price of a two bed unit $200,000 Average sale price of a three bed unit $250,000 Vacant land (residential block) $200,000 Rental average for a two bed unit $180 per week Rental average for a three bed unit $220 per week Rental average for a house $300 per week In the past 12 months there have been 1,000 residential sales: 375 residential homes in the newer area 75 homes in the established area 100 one bedroom units 350 two bedroom units 100 three bedroom units There are 2,500 rental properties: these comprise 1,000 × 2 bedroom units, 500 × three bedroom units, and 1,000 × houses. 2. Based on the calculations you have completed for Question 1, do you believe there is a business opportunity for you? Explain your reasons. 3. Explain why it is better for a real estate agency to establish individual profit centres instead of incorporating all income and expenditure as one entity 4. Prepare a cash flow analysis. For the purpose of this exercise we discuss only sales commission, not property management. However, the principles for calculating cash flow for property management are similar to those for calculating sales commissions. If your intention is to operate a property management business, or to have other separate profit centres, you may like to use your own data to complete this exercise. Assume for the purpose of the exercise that the two business owners are actively involved in sales and they will employ two other salespersons. There are also two office administrators employed .

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