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1. Revenue and income: The first step in evaluating the financials of a property management company is to look at its revenue and income. This will give you an idea of the company's revenue stream and its profitability. Compare the company's revenue and income over the past few years to see if there has been any growth or decline.
2. Expenses: It is also important to analyze the company's expenses, including operational costs, maintenance expenses, and employee salaries. Look for any major fluctuations in expenses and try to understand the reasons behind them. Higher expenses could indicate inefficiency or poor management.
3. Occupancy rates: For residential and hotel property management companies, occupancy rates are a key metric to evaluate. This reflects the demand for the company's properties and its ability to generate revenue. A lower occupancy rate could indicate a weak market or poor marketing and management strategies.
4. Average rent/stay: Another important metric to consider is the average rent or stay for the company's properties. This will give you an idea of the pricing strategy and the company's ability to attract and retain tenants or guests. Compare the average rent/stay to the market rates to see if the company is charging a competitive price.
5. Debt and leverage: Property management companies often use debt to finance their operations. Evaluate the company's debt levels and its leverage ratio to understand its financial stability. A high level of debt could indicate a higher risk for the company.
6. Cash flow: Cash flow is a critical aspect to evaluate as it reflects the company's ability to generate cash from its operations. Look at the company's cash flow from operations, investing activities, and financing activities. Pay attention to any negative cash flow which could indicate financial issues.
7. Capital expenditures: Property management companies need to invest in maintenance and upgrades of their properties to keep them attractive for tenants or guests. Analyze the company's capital expenditures to see if it is investing enough to maintain and improve its properties.
8. Market and competition: It is essential to evaluate the market and competition of the property management company. Look at the industry trends, demand for properties, and competition in the market. This will give you a broader context to assess the company's financial performance.
9. Management and leadership: A strong and experienced management team is crucial for a property management company's success. Look for any changes in leadership or red flags that could impact the company's financial health.
10. Future growth prospects: Lastly, assess the company's future growth prospects by considering its expansion plans, ability to acquire new properties, and market demand. This will give you an idea of the company's potential for long-term success.

The cost structures and profit margins in the property management industry can vary depending on the type of property being managed. Generally, property management companies charge a percentage of the rental income as their fee for managing the property.
In the office property management industry, the cost structure is usually a combination of fixed and variable costs. Fixed costs include salaries, rent, utilities, and office supplies, while variable costs include marketing and maintenance expenses. Profit margins in this sector can range from 10% to 30%.
The residential property management industry typically has higher profit margins compared to the office sector. This is because residential properties generally have higher rental rates and lower operating costs. The cost structure in this sector is also a combination of fixed and variable costs, with the addition of property maintenance and repair costs. Profit margins in this sector can range from 15% to 40%.
In the hotel property management industry, the cost structure can be more complex due to the additional expenses related to providing services and amenities to guests. Fixed costs include salaries, utilities, and marketing expenses, while variable costs include maintenance, housekeeping, and food and beverage costs. Profit margins in this sector can range from 20% to 50%, depending on the occupancy rates and average daily room rates of the hotel.
Profit margins may also be affected by the location and size of the property, as well as the efficiency and effectiveness of the property management company. However, in all sectors, effective cost management and maximizing rental income are key factors in achieving higher profit margins.