Profit margin is a core element of every business. This is true with Real Estate Investing also. Without it, there is no business. Without it there is no ability to pay expenses. There is no ability to pay employees. No ability to pay workers. No opportunity to create jobs and help people have a great place to live, whether they are buying or renting.
Making money is important in every business. It is the only thing that allows us to survive.
Money is not bad. Having a business that makes money is not about greed. (Greed is what the bad individual will bring to the table.)
Money has evolved from the roots of simple trade of goods and services into establishing a common metric to judge value. At a certain point swapping eggs and milk with your neighbor simply became too difficult and not as effective as needed. The common metric of dollars was established and has allowed people and businesses to flourish.
It has also caused businesses to die off. If there isn’t enough value, either perceived or actual, there isn’t viability and the business does not survive. Every business must trade some type of value to earn dollars. This is the margin.
The profit margin in real estate matters. It’s what keeps us alive. The margin is the simple difference between revenue and expenses – between rent and PITI. This margin is our Cashflow!
BONUS – We earn in more ways than just with Cashflow. The Margin matters, but there are other profit centers that help make real estate on of the absolute best investments out there!