Calculating Profits and Losses: A Practical SEO Analysis of Real Estate Market

When venturing into the real estate market, it is crucial to understand the financial aspects of property sales and transactions. The scenario presented here provides a detailed analysis on calculating profits, losses, and the overall financial health of a property. This article delves into the steps taken to find the loss percentage on remaining flats after a series of sales with varying profit and loss margins.

Problem Context and Breakdown

Initially, the cost of 30 flats is given at Rs. 60 lakhs each, totaling Rs. 180 lakhs.

Step 1: Calculate the Total Cost

The total cost of the flats is straightforward, multiplying the number of flats by the cost per flat.

Rs. 60 lakhs/flats * 30 flats  Rs. 180 lakhs

This is broken down as Rs. 18 crores.

Step 2: Determine the Number of Flats Sold and Their Selling Prices

Step 2 involves breaking down the flats into different categories based on the profit and loss percentages.

Flats Sold at 15% Profit

First, 1/3 of the flats were sold at a 15% profit.

1/3 * 30 flats  10 flats
10 flats * Rs. 60 lakhs  Rs. 600 lakhs

The selling price is calculated as:

Selling Price  Cost Price   15% of Cost PriceSelling Price  Rs. 600 lakhs * 1.15  Rs. 690 lakhs

Flats Sold at 6% Loss

Next, 1/6 of the flats were sold at a 6% loss.

1/6 * 30 flats  5 flats
5 flats * Rs. 60 lakhs  Rs. 300 lakhs

The selling price is calculated as:

Selling Price  Cost Price - 6% of Cost PriceSelling Price  Rs. 300 lakhs * 0.94  Rs. 282 lakhs

Step 3: Calculate the Total Selling Price

The total selling price is the sum of the selling prices from both transactions.

Total Selling Price  Rs. 690 lakhs   Rs. 282 lakhs  Rs. 972 lakhs

Step 4: Calculate the Total Loss After Selling the Remaining Flats

The builder incurred a net loss of 10%, meaning the net revenue from all sales was 90% of the total cost.

Net Loss  10% of Rs. 1800 lakhs  Rs. 180 lakhsTotal Revenue  Rs. 1800 lakhs - Rs. 180 lakhs  Rs. 1620 lakhs

This is the total income the builder should have achieved from all sales.

Step 5: Calculate the Selling Price of the Remaining Flats

The selling price of the remaining flats is calculated as follows.

Selling Price of Remaining Flats  Rs. 1620 lakhs - Rs. 972 lakhs  Rs. 648 lakhs

Step 6: Determine the Cost Price of the Remaining Flats

The cost price of the remaining flats is 15 flats * 60 lakhs/flats Rs. 900 lakhs.

Step 7: Calculate the Loss on the Remaining Flats

The loss on the remaining flats is the difference between the cost price and the selling price.

Loss  Rs. 900 lakhs - Rs. 648 lakhs  Rs. 252 lakhs

Step 8: Calculate the Loss Percentage on the Remaining Flats

The loss percentage is then calculated based on the cost price.

Loss Percentage  (Loss / Cost Price) * 100Loss Percentage  (Rs. 252 lakhs / Rs. 900 lakhs) * 100 ≈ 28%

Conclusion

The loss percentage on the remaining flats is approximately 28%. By following a structured approach to financial analysis, real estate developers can better manage their investments and avoid significant financial losses.

Keywords

real estate profitability cost analysis property sales profit and loss calculation real estate market analysis

References

For a deeper understanding, consider referring to financial analysis tools and real estate market studies.