Commercial real estate in Islamorada and the Florida Keys can be a great investment. These types of properties include retail buildings, office buildings, warehouses, industrial buildings, apartment buildings, and mixed use buildings. While they provide a great source of income, it is necessary to manage these properties. Owning commercial real estate offers the opportunity of earning income on your investment. The business owner or lessee many time will then handles all or most of the property expenses directly. Cashflow allows for the means to cover real estate taxes and mortgage on the commercial property.
Key commercial real estate metrics include:
NOI (Net operating income): This is calculated by valuating the property’s first year gross operating income and then subtracting the operating expenses for the first year. NOI defined
Cap rate: (Capitalization of earnings): This is used to calculate the value of income producing properties Capitalization Rate defined
Cash on Cash: This is the ratio of annual before-tax cash flow to the total amount of cash invested, expressed as a percentage. Cash on Cash defined