Commercial real estate can be an incredible way to build a nest-egg for retirement or amass a huge fortune you can use to leverage all sorts of business endeavors in your life. However, before you become the next real estate mogul, there are some basic investing terms youb ll need to know.
- Cash flow: Everybody thinks they know what this means, but really, it means your net operating income minus your debt service. Figure your monthly cash flow by dividing your annual number by 12.
- Debt service: Your debt service is calculated by multiplying your monthly mortgage rate by 12.
- Vacancy rate: If youb re investing in multi-unit commercial buildings this a term youb ll likely need to get familiar with. Your vacancy rate is the number of vacancies divided by the number of units you have in a building. You can determine your vacancy rate in all buildings if you have more than one by totaling the number of vacancies and dividing it by the total number of units available to rent.
Contact Morris Southeast for more information and to find South Florida commercial real estate that fits the needs of your business, or for investment properties to develop over time.
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