Return on Investment in Commercial Real Estate
In commercial real estate, return on investment (also known as ROI), is a measurement of how much money an investor receives from an investment after all expenses have been deducted. The formula for ROI is ROI = (Investment Gain - Investment Cost)/Cost of Investment.
Investment Variables in Commercial Real Estate
When it comes to making a decision on whether to invest in a commercial property, there are a variety of variables that an investor can take into account. First and foremost, in many cases, is return on investment, which calculates the amount of money that a investor will make compared to the amount of money they’ve invested into the property, minus any expenses. Other variables include the safety of an investment property, a property’s development potential, the property’s location, and an individual investor’s financial instincts.
Appraisals in Commercial Real Estate
A commercial property appraiser conducts an appraisal, which provides a market value of a commercial real estate asset. This is essential when seeking financing and when purchasing a property.