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Tips To Calculate Profitability Of Commercial Property

JohnReider
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Tips To Calculate Profitability Of Commercial Property

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  1. Tips To Calculate Profitability Of Commercial Property Success of a commercial property investment is defined by the return that it offers. Here is are simple methods of determining profitability of a commercial property. Calculate the net income by subtracting the expenses associated from the revenue generated by renting out the property. Include mortgage payments, repair expenses, maintenance & management costs in the total expenses. Also factor in the vacancy rate of the property. Factor in depreciation costs of the property. This should include depreciation for structure, plumbing, concrete, asphalt, electrical installations, fixtures etc. Properties with cash flow zone (Gross annual rent/ purchase price X 100) of 5%-7% are considered profitable . If the price of property has increased significantly, then also commercial property investment is considered successful. www.johnreider.com John Reider Properties 455 E. Central Texas Expwy, Suite 101, Harker Heights, TX 76548 Phone: (254) 699 - 8300 Image Source: Designed by Freepik

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