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What is a Rent Roll? How is it Used in Commercial Real Estate?

What is a Rent Roll in Commercial Real Estate

Any potential lender or investor needs to utilize commercial rent roll in the evaluation of any property. It provides insight into if the property is a good risk or not.

That is why commercial property rent roll tends to be one of the first things investors ask for when considering the investment into the property. It contains a significant amount of information about the tenants … Read More

How to Calculate Floor Area Ratio for Commercial Property

How to Calculate Floor Area Ratio for Commercial Projects

How to Calculate Floor Area Ratio for Commercial Property

Understanding the floor area ratio is important for commercial real estate investors. The metric is specifically important for developers looking to make the most use out of the property their commercial building will occupy. Here are some insights into what it is, how the floor area ratio formula works, and when it is used.

What Is … Read More

Understanding Assumable Loan in Commercial Real Estate

Understanding Assumable Loan in Commercial Real Estate

An assumable loan is a type of loan that the new purchaser of the property can take over. Assumable loans are designed to allow the buyer of the commercial property to take over the loan held by the existing property owner when the property is sold.

There are numerous situations where it is essential to know if a loan is assumable and whether or not … Read More

Is Earnest Money Refundable in Commercial Real Estate?

Is Earnest Money Refundable

Earnest money isn’t absolutely required in commercial property deals, but it’s a common feature of most agreements. Here’s a look at earnest money: what it is, how to negotiate it, and whether it’s refundable.

What is Earnest Money?

Earnest money is a deposit that the buyer of a commercial real estate property gives (indirectly) to the seller. The purpose of the deposit is to demonstrate … Read More

Land Use Restriction Agreement for Multifamily Housing

Land Use Restriction Agreement

Many multifamily investors and developers must follow specific rules when it comes to utilizing the land they or projects they build when they are using Low Income Housing Tax Credits (LIHTCs) to pay for the cost of these projects. One of the specific rules that apply to LIHTCs is the requirement to meet rent limits for a period of time. Other restrictions also apply.

All … Read More

Owner-Occupied Commercial Real Estate: The Pros and Cons

Owner-Occupied Commercial Real Estate

Owning commercial real estate comes with tax, financial and other benefits. Many businesses across industries choose to purchase owner-occupied commercial real estate, so they can realize these diverse benefits. Here’s a look at what owner-occupied commercial real estate is.

What Does Owner-Occupied Commercial Real Estate Mean?

Owner-occupied commercial real estate is a property that’s both owned and used by the same business. The business usually … Read More

Understanding Net Effective Rent in Commercial Real Estate

Understanding Net Effective Rent in Commercial Real Estate

Rent is the amount tenants pay for their leased spaces, but it can be calculated in a couple of different ways. Net effective rent calculates the amount that leases generate on an average monthly basis. Landlords may strategically use net effective rent in their listings and marketing, and they should know it even if they don’t advertise rent this way.

What Does Net Effective Rent … Read More

Vacancy Rate: How to Calculate it for Your Rental Property

Vacancy Rate How To Calculate It For Your Rental Property

Vacancy rates are a big factor when selecting an investment property. It provides information on how many properties are vacant and for how long, but it can also shed light on how well the property is being managed.

If purchasing investment property, understanding the property’s vacancy rate may provide insight into the desirability of the property, especially when compared to other area vacancy rates. Understanding … Read More

What is Commercial Cash-Out Refinance & How Does It Work?

What is Commercial Cash-out Refinance

Commercial cash-out refinances grant property investors access to the equity that would likely otherwise be illiquid. Selling and cash-out refinancing are two main ways to realize equity and reallocate capital, and refinancing has several advantages.

What Exactly is a Commercial Cash-Out Refinance?

A commercial cash-out refinance is a process in which property is refinanced, and equity is withdrawn; hence the term “cash-out refinance.”

The property … Read More

How to Calculate Effective Gross Income

How to Calculate Effective Gross Income

A commercial real estate property’s potential income isn’t just the monthly rents times twelve. Such a simple approach misses additional revenue sources and potential costs and thus doesn’t fully and accurately reflect the income that the property should generate. Instead, calculating effective gross income provides a much more accurate estimate of potential income.

What is Effective Gross Income (EGI)?

Effective gross income (EGI) projects the … Read More