Just like a company traded on the stock market, an income-producing real estate property can be valued based on the sum of the discounted values of its future expected cash flows. This is known... read more →
How do you determine the discount rate for your analysis? An easy question to ask and a somewhat tricky one to answer. What is the discount rate? The discount rate... read more →
What Is Cash-On-Cash Return? Definition Of Cash On Cash Return And Explanation Of How It Can Mislead
Question from one of our readers: what is cash-on-cash return in a commercial real estate investment context? Answer: At its most basic, cash-on-cash return is defined as annual pre-income tax... read more →
Cap rates (capitalization rates) are still one of the most-mentioned and least-understood elements of commercial real estate. What is a cap rate? The simplest way to define a cap rate... read more →
A good question. Here are my thoughts: A property purchaser's discount rate represents their perceived opportunity cost in making one investment over another investment of comparable characteristics, including valuation, risk... read more →