Commercial Real Estate Terms Revealed by Brian Fielding

Brian Fielding can help you get more control of your financial future

Brian Fielding of Fielding Investments shares some of the most common terms in the commercial real estate market and what they mean for potential investors.

Now that a new year has begun and the commercial real estate market is showing a number of promising trends, Brian Fielding knows that individuals are looking for ways to become players in the market. These individuals want to make sure that they can secure an investment that will show them a strong return, and commercial real estate is one of the smartest ways to guarantee such a return. However, those who are interested in the market must first establish a strong understanding of it, and must know everything from the most important steps toa successful commercial real estate purchase, to the jargon that is used in the industry. To aid those who are interested in purchasing commercial real estate, Brian Fielding shares his expert knowledge on some of the most important terms used in the market.

  1. Cap Rate: Also known as capitalization rate, Brian Fielding shares that this term refers to the method used to determine the value of a property that is producing a regular income. The number is calculated by taking the income of the property and dividing it by the total value. This process is used to determine the possible future profits on the property.
  2. Net Operating Income (NOI): The NOI is used to determine the annual income of a property for the owner. A profitable property should produce a positive NOI. Brian Fielding reveals that this number is found by first determining the property’s gross income for the year. The investor must then subtract their total operating costs for the year. This will determine the property’s NOI and whether or not it has been profitable.
  3. Cash on Cash: This term refers to the rate of return on an investment property. The cash on cash return measures the relationship between the down payment and investment already made on a property and the annual return. This number is found by dividing the annual dollar income by the total dollar investment. Brian Fielding points out that once the cash on cash return is determined it can be used to compare the property to competing ones.

With knowledge of the industryand an understanding of key terms, individuals should rest assured that they will be able to make informed decisions about investing in commercial real estate. Brian Fielding is glad to offer this key information to aid others as they take advantage of the real estate market and begin taking the steps to pick a profitable property. For more information visit http://brianfielding.com/.


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