Useful terms investors should know

Real Estate Agent


Useful  terms investors should know when buying commercial property:

Gross Rent Multiplier (GRM) - method used to determine market value of small apartment unit

Capitalization Rate (CAP) - a better method to determine the rate of return using net income and price

Net Operating Income (NOI) - income remaining after vacancy and expenses

Cash on Cash Return - gives a percentage return of cash flow gained from initial investment 

Cash Flow - profit from the difference of net income minus mortgage payments



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