Wages

In the context of real estate financial modeling, wages refer to the salaries or hourly rates paid to employees who work on or for a property. These could include property managers, maintenance staff, leasing agents, security personnel, cleaning staff, and other employees.

Wages are a significant part of operating expenses for many types of real estate, especially for commercial properties and larger residential properties like apartment complexes. They can impact several key financial metrics, including net operating income, cash flow, and return on investment.

The specifics of how wages are handled can vary widely based on the type of property, the size and complexity of the property, the level of service provided to tenants, and other factors. For example, a luxury apartment complex might have a larger staff and higher wages than a comparable budget property, due to providing more services and amenities to tenants.

In some cases, certain staff members might live on the property as part of their compensation. For example, a property manager might receive a free or discounted unit in an apartment complex. These arrangements can also impact the property's financials, as they reduce the number of revenue-generating units.

As with all operating expenses, landlords and property managers should carefully track wages and consider how they impact the property's overall financial performance.