In the world of real estate investing, you’ll quickly find yourself swimming in an “alphabet soup” of acronyms. You likely already know ROI (Return on Investment) or NOI (Net Operating Income). But as you start looking at more complex deals—like hotels, senior living facilities, or even retail strips—a new term will pop up: EBITDAR. EBITDAR
Every new real estate investor makes the same mistake. They calculate their profit with just two numbers: Rent minus Mortgage. This single error is the #1 reason “profitable” rental properties end up costing them money. While that initial calculation feels good, it ignores the real-world costs that can turn a
When you’re exploring real estate investments like a Real Estate Investment Trust (REIT) or a fund, you’ll see a big, bold number: Distribution Yield. Immediately, questions pop into your head: Is this like an interest rate? Is it guaranteed? Is it the same as a stock dividend? This guide will break
For real estate investors, understanding the financial metrics of a property is like reading a roadmap to profitability. But what happens when two crucial numbers—assessed value vs market value—don’t align? These two terms often confuse investors, yet each plays a vital role in determining the financial viability of an investment
When it comes to maximizing your real estate investment returns, understanding depreciation is key. This process ties into several components of the PRIME real estate investing framework, particularly in the Research, Invest, and Manage stages. During the Research phase, understanding how depreciation impacts your financial projections, such as ROI and
Understanding the value of an asset, whether it’s a piece of real estate or a business, is key to making smart investment decisions. The income approach to value is one of the most powerful tools you can use to estimate value based on future income. By focusing on projected earnings,
Finding profitable real estate investments can be tough. But there’s a shortcut: the 2% rule. This simple rule helps you quickly identify potentially high-yielding rental properties. It suggests that a property’s monthly rent should be at least 2% of its purchase price. This guide will show you how to use
As a real estate investor, you’re constantly evaluating properties, looking for the next opportunity to build your portfolio. One tool that helps in making quick investment decisions is the Gross Rent Multiplier (GRM). GRM is a simple property valuation metric that can assist you in determining whether a property is
Understanding the various metrics used to evaluate property performance is crucial for a real estate investor or anyone involved in commercial real estate. Among these metrics, cash on cash return is a powerful tool for assessing real estate cash flow. This article will explore why cash-on-cash return is considered the