Lost income

While there are many costs associated with business there is also the lost income (opportunity cost).

Using rental properties as an example, some of the expenses are easy to plan for (cost of the property, real estate taxes, insurance etc) however you also have to look at the lost income costs as well. Vacancies result in lost income. Tenants who don’t pay result in lost income. Tenants who cause damage that results in vacancies while repairs are made results in lost income.

Looking at a business opportunity by simply taking into consideration ideal revenue minus hoped for expenses without factoring in lost revenue might lead to great disappointment.

Have a great day!


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