Effective Gross Income is a more accurate measure of a property’s value than Gross Potential Income. This is because effective gross income shows the cashflows a property is actually generating rather than what it could generate at 100% occupancy and market rents.
Read MoreWhen learning about real estate finance, it is important to learn all the key fundamentals of the industry. Here are the TOP 5 BEST Real Estate Finance and Real Estate Financial Modeling courses on the market.
Read MoreBad debt is an inevitable part of doing business regardless of whether the business is real estate or not. There will always be a possibility that when working with a client, they will not be able to fulfill their financial obligations. In order to make your financial model as accurate as possible, one should determine the best method to calculate bad debt and apply it to the model.
Read MoreFranchise Tax is a complicated yet important expense that all real estate professionals should recognize. It is important to know whether or not this tax applies to one’s business and how it is calculated within said business’ respective state.
Read MoreUtilities should be accounted for accurately as they can significantly affect the cash flow projections of a property and skew decisions when determining if a project is feasible or not.
Read MoreThe gross sales proceeds are an important part of any real estate cashflow model. One must determine an appropriate method to calculate the NOI (trailing 3 vs. forward 12) and then determine a cap rate. Gross Sales Proceeds are before any reduction for expenses, taxes, and fees. By selecting the most applicable method an analyst can make their model as realistic as possible.
Read MoreGross Potential Rental Income is essential to real estate professionals as it shows a property’s maximum potential ability to accrue income. This information serves as an important baseline for any evaluation of a property’s value and helps investors assess just how much revenue a given property can generate.
Read MoreIn any real estate lease, concessions offer unique benefits to potential tenants to increase the attractiveness of the property and fill a vacancy. Concessions are important in times of high supply and minimal demand as the landlord must offer something that a similar building fails to add. When offering concessions, it is important to weigh the opportunity cost of lost income due to these benefits.
Read MoreLearn about the intricacies of commercial leases with our discussion on Gross, Modified Gross, and NNN structures. Explore the predictability of expenses, shared responsibilities, and strategic shifts, empowering both property owners and tenants with essential insights for navigating these agreements strategically.
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