real estate noi gpr

What are Commercial Real Estate NOI and GPR?

Commercial real estate investing is daunting because of how much capital and risk are involved. On top of that, the complicated acronyms and complex formulas of the field can cause confusion even for veteran investors.

If you want to better understand how your commercial real estate investment performance is being measured, look no further.

Let’s talk about NOI and GPR as barometers for your next CRE investment.

What is NOI (Net Operating Income)

NOI or Net Operating Income is a calculation used to measure the profitability of cash flowing (income-generating) RE investments.

NOI is basically all the revenue from a property minus all the necessary operating expenses.

It is purely a before-tax figure that appears on the property’s income statement. This figure excludes the principal and interest payment on your loans, deprecations, amortization, or capital expenditure.

In other industries, this metric is called “EBIT” or Earning Before Intrest and Taxes.

NOI VS EBIT

NOI is used to analyze the ability of RE properties to generate income.

EBIT, however, is determined by subtracting a company’s COGS (cost of goods sold) AND operating expenses from its revenue.

Simply put, in real estate, there aren’t any “sold goods”, therefore, NOI is unique to RE.

Example:

You invest and purchase a property that generates $20,000,000 (rent & fees).

Operating it will cost you $6,000,000. Depreciation expenses will cost you another ~ $200,000.

Your NOI will be $14,000,000.

Your EBIT, however, will be $13,800,000, since it takes depreciation expenses into account.

How to Calculate Net Operating Income (NOI)

As stated, calculating NOI is simply subtracting the operating expenses from revenue generated by a property.

Revenue could come from rental income, parking fees, service charges, and so on.

Operation expenses, for example, could be property taxes, insurance, and repairs.

Formulaically:

NOI (Net Operating Income) = RR-OE

RR = real (estate) revenue

OE = operating expenses

Understanding NOI

Now that we generally grasp NOI better, let’s dive in a bit more.

Rent income from tenants is the goal. But your property might yield cash flow from other venues and amenities, such as a laundry facility, electric car charging stations, vending machines, and parking structures.

As mentioned, capital expenditures, such as the cost of new solar roof panels, or a new HVAC system for the entire building, are not included in the calculation.

Also not included are the operating expenses, like the cost of running utility repairs, maintenance (cleaning and repair services—including insurance premiums).

Calculating the NOI will help you determine the capitalization rate – which actually helps you appraise the property’s value—ultimately letting you compare between different property investment opportunities (when selling or buying).

NOTE:

NOI is also used when calculating the total ROI/IRR, cash return, and net income multiplier.

Financed properties use NOI in their DCR (Debt Coverage Ratio) formulas. This helps lenders and investors know if the property’s generated income covers its debt payments alongside the usual operating expenses.

What is a good NOI in real estate?

Truthfully, there’s no such thing as “good” NOI. In reality, you can compare one property’s NOI to a similar one in the same area. It will allow you to compare expenses and see if yours are too high. Then, improving your overall cash flow from the property could be achieved by strategically cutting operating costs or by creatively increasing rental income.

Let’s expand on how you can maximize your NOI.

How to Improve NOI

There’s no special formula or hidden way to increase your NOI. As we mentioned earlier, it’s about increasing flow and/or decreasing costs. But here are three tips to help you improve your investment’s performance.

  • Creating extra income: outside the realm of increasing income or decreasing loss is the creative route; new ideas and strategic partnerships to increase the cash flow pipe outside of filling vacancies or increasing rent, like having billboards and big posters on the building for extra ad revenue, extra parking levels where parking is scarce, or even extra pet fees from existing tenants.
  • Minimize operation expenses: bleeding money is a terrible thing for any investment. It undermines your earnings potential. Reviewing your property’s expenses – if you haven’t done so in a while – could be a good place to start. Maybe it’s high property management fees, maybe it’s time for solar panels on the roof, or investing in a more efficient cooling or water system for the entire building. Calculate and do the math on what will cost you more in the long term; making such improvements now or losing money long term if you didn’t.
  • Increase rental income: which is obvious. But you can also evaluate your vacancies fill-up rate. Maybe it’s the slow process of new tenant’s onboarding and move-in timeline, and working on speeding up such processes. Maybe investing in marketing and better branding for the property can decrease the amount of time spaces sit empty. The math should be: what costs me more? Better marketing or empty spaces. Signing incentives with new tenants is also a valid tactic.

Now that we covered NOI, and expended on rent–let’s talk about GPR.

What is GPR?

GPR is the acronym for Gross Potential Rent. Commercial real estate investors must make educated decisions when determining which properties to invest in. While there are many strategies and formulas to measure such metrics, GPR is a fundamental one to know.

In layman’s terms, GPR is the total amount of income you can expect to receive from a property you bought based on market rent. To determine the GPR, you assume all available units in the property are fully occupied, and that rent for each one is paid in full.

Importance of GPR

GPR is important because, throughout the disqualifying process, it’s the first thing you need to know when choosing to pull the trigger on a deal. When you purchase a piece of commercial property, you pay a flat fee. GPR lets you know how profitable the piece of property is and its earnings potential.

Calculating Gross Potential Rent

First, when comparing similar properties in the same proximity, you need to ask your advisors, office, investment firm, brokerage, and agents for the market average.

Then, once the numbers are in front of you, doing some of your own research and comparing that with the information you got from your team will produce higher certainty. You’d like to calculate the GPR for yourself for peace of mind – even if you’re investing as a LP.

For example:

A property you’re looking to buy has 30 units and the market rent is $800 per month.

The GPR will be 30×800 (30 units times 800 dollars) = 24,000. Then, times 12 (one year).

24,000 x 12 = 288,000 USD.

GPR = $288,000.

——

We discussed what NOI is, what it’s used for, how to improve it using inside and outside the box thinking, what is GPR, how important it is, and how to use it to evaluate a deal. Now you have a better grasp on what deals can help you accumulate more wealth, have more impact, and create a stronger legacy.

*Disclaimer

Investing in commercial real estate can be risky. It is not a fit for everyone. While we aim to provide general information to help you better understand CRE investments, we are neither providing any investment advice nor advising for or against any particular investment.

real estate investing risks

Understanding The Risks of Commercial Real Estate Investing

Plenty are the pitfalls of CRE Investing. Today, we’ll talk about two terms you must look into if you want to understand the risks of commercial real estate when choosing it as part of your investment portfolio: vacancy rates and delinquencies.

What is vacancy rate?

Loan officers grin and investors panic to the sound of it.

The vacancy rate is the percentage of units which are vacant (empty) currently, quarterly,  or during a full calendar year. It’s the percentage of all available units in, for example, an apartment building, that are unoccupied at a particular time.

Vacancy rate is the exact opposite of occupancy rate, which is the percentage of units in a rental property which are occupied. High vacancy rates are a red flag. It indicates that a property is not renting well. Low vacancy rates mean the opposite.

Understanding vacancy rates

Vacancy rates are important because they tell investors (and property managers) how certain properties (buildings) are performing when compared to other similar properties in a specific area.

Three types of vacant units are common, and it’s important to distinguish them from one another:

  • Vacant but ready to be rented
  • Turned off upon the exit of a tenant
  • Not currently rentable due to a need of repairs/renovations

Once you know the vacancy rate of a property you’re looking to invest in, you can compare it to the area’s vacancy rate, discovering the potential of your investment and mitigate the risk.

Several factors can affect vacancy rates, such as:

  • Overpriced rent
  • Economic conditions
  • Less demand for your rental type
  • Poor property management/upkeep

It’s common to see vacancy rates increase during economic recessions, which are associated with low population growth and high unemployment rates–leading to a lack of demand.

If you encounter a property with high vacancy rates within an area with high demand and favorable market conditions, that usually means the problem lies with the landlord or the rent price. Lowering rent and offering incentives can help.

Real estate vacancy rate analysis

You can use vacancy rates as an analytics metric.

Percentage changes in things like:

  • Amount of vacant VS. occupied units
  • Length of time occupied units remain active
  • Length of time units remain inactive (empty)

Can help you determine how competitive and attractive a property is.

Vacancy rates are often used as an analytical metric to evaluate a single property. However, it’s also used as an economic indicator for the overall health status of the real estate market. Firms serving the CRE market commonly gauge the overall industry strength using such metric, alongside others like: new zoning permissions and construction activity.

Additionally, vacancy rates from the CRE are used to gauge the (un)employment rate.

What is considered a good vacancy rate?

A good vacancy rate varies depending on the rental market in your city, though, as a general rule, five to eight percent vacancy is the average. But remember, it’s “unfair” and inaccurate to compare a commercial office building to a four-story apartment building. Furthermore, consider different factors in your comparison like small towns versus major cities.

Note: The U.S. Census Bureau compiles residential vacancy data every quarter.

How do you calculate vacancy rate?

Vacancy and occupancy rates combined are 100% of the total units within a property.

Calculating vacancy rate is done by taking the number of vacant units, multiplying that number by 100, and then dividing that by the total number of units.

If you invested in an apartment building with 100 units and 10 of those are unoccupied, then your vacancy rate is 10%.

That said, there are three methods of measuring vacancy rates in rental properties:

  1. Market average
  2. Physical vacancy rate
  3. Economic vacancy rate
  • Market vacancy rate is the average rate by property type. This helps investors pin down the probable vacancy rate – determining if a certain property is performing below or above average within that asset class.
  • Physical vacancy rate is basically the amount of time units remained empty over the past 12 months while taking into account the number of units currently vacant.

 

  • Economic vacancy rate is the total amount of rent you lose when your property is vacant in relation to the total GPR it can generate. Most investors consider this formula best because the equation helps figure out income, not time.

So, to recap:

Vacancy rate could be measured in a few ways. Ultimately, it’s the percentage of all the available units within your property which are vacant or unoccupied (right now, or during a certain period of time), and could entail units which need repairing. It’s used to determine the potential of an investment by comparing it fairly to other comparable properties within the same area, market, and asset class.

Now let’s talk about a common pitfall of CRE investing: delinquencies.

What does delinquent mean?

The term is used to describe a failure to perform a duty by financial professionals.

It’s most often used to describe entities in the state of being arrears, or late with payment.

Avoiding jargon, if you are delinquent, you are past due on your financial obligations, like a credit card/bond payment, or a loan.

Financial delinquencies basically mean a borrower of money could not make a satisfactory (quantity-sufficient/timely) payment. It could happen to an individual, or an entity, such as a corporation, and usually lead to defaults.

What are real estate delinquencies?

A real estate investor who’s late on his loan is delinquent. If he fails to pay the loan within the agreed time frame of the contract he signed, he will default on his loan – risking his collatorales and damaging his credit.

Commercial real estate is a field which allows more leeway in contract negotiations. It’s important you understand your contract to find out how long it takes for your lender to consider you both delinquent and default, as length of time varies depending on the lender and type of debt. The average is 60 days; with 30 days being rigid, and 90 days more lenient.

Delinquencies are reported to credit reporting agencies, but can be removed from your credit report history over time or when appealed.

What to remember:

Being delinquent is being in debt and past due on paying it back. How long can you be late with your payment, or by how much (sum threshold) can be negotiated in your contract. Being delinquent and breaking the terms agreed upon in your contract will make you default on your loan, and it will affect your credit score negatively. Delinquency rates are used to show how many accounts in a financial institution’s portfolio are late and at risk of defaulting.

What is the current delinquency rate?

As more people start going back to work and the office, more owners have been able to catch up on delinquent loans, which severed predictions of a massive pandemic-induced distressed real estate cycle.

The rate has now fallen for 14 consecutive months, and as of September 2021, stands at 11%.

Better understanding the risks of commercial real estate investing is crucial. Having covered today the fundamentals of such risks, like vacancy and delinquency rates, what they are, better understanding them, how they are calculated and why – will help you become a better CRE investor.

*Disclaimer

Investing in commercial real estate can be risky. It is not a fit for everyone. While we aim to provide general information to help you better understand CRE investments, we are neither providing any investment advice nor advising for or against any particular investment.

commercial real estate investing

How to Invest in Commercial Real Estate

Investing can be complicated, and commercial real estate is a wide industry. Combining the two together can cause headaches, even for more experienced investors.In this article, you’ll learn about the fundamentals of commercial real estate, what it’s all about, its different sectors and sub-industries, if it’s worth investing in, how you can invest in it, and what is considered a good return.

Let’s break ground.

What is commercial real estate?

CRE, or commercial real estate, is land and property used for business-related purposes. Storefronts, shopping centers, and workspaces, rather than living space.Properties that are used as a living space are considered residential real estate. However, when buying any property with more than five doors (or five units), like multi-family, for example, it’ll be considered as commercial real estate, even though people live there.

Types of commercial real estate

When you hear the words “commercial real estate” you probably imagine tall reflective buildings made of glass with an antenna at the top, and even some office space full of cubicles where sunlight shines through.When investing your money into CRE as a LP without prior knowledge can at best keep you up at night, and at worst, lose you millions. So, here are the four basic sectors your money will flow into when choosing CRE as an investment vehicle:

Office

Consists of real estate comprising office buildings. Those skyscrapers, urban high-rises, and office parks. Preferred tenants would be law firms, insurance companies, and bank HQs. Lease terms for this sector are often longer, ranging from 5-10 years.

Multifamily 

As stated earlier, any residential property offering more than five units (or five doors) is considered CRE – even though people live there. For example: apartment buildings, apartment communities, and townhomes. Size and number of units can vary widely.This type of CRE is a fan-favorite amongst investors due to its more secured cashflow. People will always need a roof to stay under. The more units/doors, the less likely you’ll pay out of pocket for vacancies. Additionally, rents for tenants in this sector are always on the rise, while they tend to stagnate longer in other sectors.Lease agreements in this sector are flexible, especially in terms of duration. Commonly found are six-month and one-year leases, but not longer. Monthly leases exist but are scarce.

Industrial

This sector includes heavy manufacturing, warehouse, assembly, and R&D buildings. Customary tenants will be oil refineries, distribution centers (warehouse), product assembly factories (like cars, or laptops), and big pharma R&D departments.These properties are often located far away from desirable living areas due to noise, pollution, municipal infrastructure, and zoning regulations. Lease agreements in this sector average seven years.

Retail 

Retail CRE includes properties that provide spaces required for shops to operate daily and conduct business. Clothing shops, restaurants, and family-owned stores, for example.This sector is usually planned strategically to be located in the vicinity of desired living areas. Good examples will be shopping strips, factory outlets, and shopping malls. Earning potential varies wildly for these properties, depending largely on location, demographics, and quality.Lease lengths in retail average 3-5 years.

Different ways of investing in commercial real estate

If you feel knowing the sectors isn’t enough, we got you covered.While not exactly painting a vivid picture, this section will elaborate on what sub-industries your money flows into when you invest in CRE, helping you choose what marketplace contribution and societal impacts you want to focus on.Multifamily: 

  • Duplex / Triplex / Quadplex
  • Garden apartments
  • Mid-rise apartments
  • Student housing
  • Senior / Assisted Living

Office:

  • Central Business District (CBD)
  • Commercially zoned homes
  • Medical office
  • Suburban office buildings

Industrial:

  • Bulk warehouse
  • Flex warehouse
  • Heavy manufacturing
  • Light assembly
  • Refrigeration / Cold storage
  • Showroom
  • Storage

Retail:

  • Community retail center
  • Regional mall
  • Strip / Plaza / Shopping center

Online:

  • Commercial property real estate ETFs
  • Commercial property real estate mutual funds
  • Commercial property REITs
  • Commercial property real estate company shares
  • Commercial property construction company shares
  • Commercial property crowdfunding

Now that you have a clearer picture of where your money will be going — and how big and positive of an impact it could have—you still care, and rightfully so, about your bottom line.So, is it worth it?

How do commercial real estate investors make money?

CRE can be complicated and is a very expensive asset class. However, smart investors can discover areas with inherent demand for real estate and purchase properties while supply is still limited.Here are three methods used to increase ROI when investing in CRE:

  • Apartment building renovation

An area with a strong economy and a steady population growth can be an opportunity to buy now, and earn later. Renovating an apartment building and increasing its earning potential, via, for example, improving the living spaces of the tenants – therefore increasing the rents, and while doing so—increasing the overall price of the asset.

  • Industrial property redevelopment

Finding a distressed area/neighborhood with the potential for economical resurgence in the near future could yield high returns. A longer-term strategy will entail properties that will be rezoned for redevelopment into retail, for example, once demand skyrockets. Then, selling the property leveraging earned appreciation will liquidate your portfolio quickly. Or, you could choose to continue owning it, securing a cashflow pipeline.

  • Land entitlement

If you identify land with no current or planned development, but your research dictates it’s ripe for demographic and economic growth in the foreseeable future, you’ll want to acquire it and then obtain all the necessary permits.Obtaining a construction license, for example, doesn’t mean you have to do it yourself. You just made the job much easier for a developer who’ll cut you a fat check for the land, and do the work himself. As a limited partner, that would be the desired and likely outcome.

As you can see, alongside portfolio diversification, CRE can provide cashflow from tenants without the volatility of public investment. In your portfolio, it will also extend your ability to leverage debt via the creation of more equity when your assets appreciate over time, as this asset class holds intrinsic value.For the average investor, CRE investing is much more difficult because of its price point. For those who can put their hand on such deals, rewards will be in the form of tax deductions, as they can use the tax code properly to their advantage.

Since real estate is a deteriorating asset, the IRS allows deferring and deducting annual income taxes. The law allows depreciation over 39 years for each property. Depreciation grants you compensation for property fixing when wear and tear occurs, and to hold on to more of your money each year.Another tax benefit helping CRE investors is the 1031 exchange. It’s a tax clause that allows capital gains to be deferred. We mentioned it briefly earlier.

Basically, as you know, capital gains tax is paid on the profit you made when selling an investment.The 1031 exchange lets CRE investors hold off on that capital gains tax bill when selling the property — only if you use the earned sum to purchase another investment property. The window or time frame for this move is: sold within 45 days and bought the second property within 180 days.

Is it worth investing in commercial property?

The ultra-wealthy like putting their money into CRE.Every investment carries with it some kind of risk, and commercial real estate is no different. But generally speaking, real estate returns surpass those of the stock market.While we’re still in the midst of an economical cycle, and the pandemic had markets worry people won’t go back to their offices, today, it’s clear—the office space is recovering.For CRE, it’s common to hear “the 50% rule”, even around the most risk-averse people.

What Is the 50% Rule?

The 50% rule claims real estate investors should anticipate operation expenses to be approximately 50% of a property’s gross income. This does not include any mortgage payments but does include other expenses such as property taxes, insurance, repairs, maintenance, and owner-paid utilities.Note: the 50% rule is just a guideline. This number isn’t set in stone. In reality, the number will fluctuate, but it’s usually a good estimate.

What is a good ROI on commercial real estate?

Internal Rate of Return, or IRR, is actually the most commonly used metrics to value real estate investment opportunities. IRR is the target percent an investor is expected to earn over the life of the investment – if the investment performs as projected, which should be at least 6-8%, and typically target 8-14%. Exceptional deals go to the high tens or even twenties.

Although the IRR is a very important metric, it does not tell the complete story and should be one of many metrics to use when considering a potential real estate investment. IRR, by itself, tells us nothing about actual periodic payments or total profitability, as there’s immense variability in cash flow streams and total profit that will equal a specific IRR.

Armed with deeper knowledge on what commercial real estate is about, its sub-industries, the different vehicles used when investing in it, if it’s actually worth it, and what’s considered a good return, you can approach this matter more intentionally, safely, and let others handle it for you while sleeping easier.

 

*Disclaimer

Investing in commercial real estate can be risky. It is not a fit for everyone. While we aim to provide general information to help you better understand CRE investments, we are neither providing any investment advice nor advising for or against any particular investment.

commercial real estate investing fees

What You Have To Know About Management Fees In CRE

There are many financial indicators to help you benchmark a real estate deal and its investment’s potential; calculations like cash on cash return, internal rate of return, loan to value ratio, capitalization rate, and many others. But one crucial factor for your CRE investment, especially as a LP, will be the management fees.

Let’s elaborate on what management fees are exactly, what they include, what’s considered a good property management fee, and what to look out for.

Management fees

Property management services are provided by many companies and serve the real estate sector, both residential and commercial.

Their purpose is to insure smooth operations, like onboarding and evicting tenants, facilitating their needs, ensuring timely repairs, and allow you to take your hands off the property and focus on other ventures — all for a certain fee.

As a limited partner, your aim is to let your money work for you, and that also means delegating managerial responsibilities. Hiring a team to manage your commercial properties is a must for any serious investor.

What’s included in the property management fee?

We mentioned it briefly earlier, but it’s time to dive deeper.

The scope of property management services offered directly affects how much they’ll charge, and the types of services can vary. However, typical services include:

  • Maintaining the property (they may hire external contractors)
  • Onboarding new tenants, and evicting non paying/problematic tenants
  • Ensuring the property’s vacancy rate is low.

Sometimes, firms can take more responsibilities, like finding the best insurance companies and negotiating the best rates for their services.

Property management cost – what it includes and what to know

You can find firms who’ll accept a flat fee to maintain your property, but it’s often advised to pay them a percentage of the total rent, which makes them have skin in the game — acting as an incentive to avoid having your property vacant.

It’s also common for such firms to make money from other venues while being employed by you. For example, they might charge a tenant directly for renewing their lease.

What to expect from a property management firm to take care of, and what to look out for:

  • Evictions – as mentioned earlier. Sometimes, tenants don’t hold up their end of the agreement. It could be constant late payments, or disturbance and nuisance at a property. Your property management firm will charge a fee to go through the tedious process of evicting a tenant – typically around $400 per eviction, plus any court costs.
  • Late payments – there’s often a penalty for a late payment. How much depends on the contract signed with the tenant, with the average being 7% of their monthly rent.
  • Maintenance – done in-house or by a 3rd party contractor. Commonly, firms charge a maintenance mark-up fee, which is often an additional 7-10% of the maintenance costs for the property, like plumbing or HVAC.

Note: You’ll find companies who retain their own maintenance crews. In such a case,  negotiate what routine maintenance services are included for what you pay, and what isn’t and may be considered as extras. It’s likely they’ll try to apply labor and material charges. Make sure you aren’t blindsided, and that your agreement entails a set limit for how much they’re allowed to charge.

  • Advertising – will be a serious cost consideration and a crucial factor. Some firms may approach this topic differently than others. Some can include advertising costs in their flat fee or percentage rate, while others may split it with you. Some may avoid handling this aspect altogether, and not offer it as a service. Either way, this one will affect vacancy rates, making it paramount to nail down.
  • New tenant placement – some firms charge for new tenant placements, or will demand a bonus for getting a tenant into a lease. 50% of the first month’s rent for any new tenant placed is not unusual.
  • Tenant occupied unit – some managers will only charge if there’s a tenant in the property. If a whole office building floor is vacant, or a certain number of condos in an apartment building are empty, they may charge a reduced fee.
  • Vacancy fee – you might encounter firms asking you to put 1-3 months rent up front, or a part of it. They do so in order to cover the costs of advertising, paying the real estate agent’s commission, and for all paperwork and escrow involved.

Some owners like doing much of these themselves, and just delegate the tenant screening process.These are areas of delegation, and you should pick  which ones you do according to your managerial style. Some want to delegate certain tasks entirely to a management firm; others may want to stay very ‘hands-on’.

As a LP, it’s unlikely you’ll want to take care of any of these on your own.

Now, what should you pay a property management firm?

What is a typical property management fee?

A fair industry rate property management firms charge is 5-8% of the monthly rental value for the property, plus any expenses agreed upon in your contract.

What is a good property management fee?

Good property management fee will be between 4-5% of the total monthly rent for a commercial property. However, remember that factors like location, size, the property’s condition, the amount, type and quality of the tenants, and the agreed upon services the management firm will perform will severely affect the price. It’s good to check the common management fees in the area and compare your property to one of similar size and use.

Property management contract – what to look out for

Your contract is important and its terminology is definitive to your investment’s performance.

For example: does the contract state you’ll be paying the firm out of “rental value” or “rent due”? Or, will you be paying them out of “rent collected”? Obviously, there’s a big difference.

As stated earlier, a property management company that only gets paid a percentage of rent collected has a big incentive to do its job. On the other hand, a manager who gets paid based on “rent due” wants to get paid regardless of your tenant situation, which could mean negative cashflow for you.

The scenario you’d like to create should be an advantageous one — where you pay your management out of collected rent only.

Our take: in reality, communication and quality of service precede fees. So, paying extra for a top-tier property manager can be a wise investment. This is a partnership, and finding a high-performance partner with quality and integrity is more important in the long run. The right firm can help you retain quality tenants, get rid of difficult ones, and boost property earnings with great maintenance and superb advertising. Finding a cheaper firm can cause the exact opposite.

Are property management fees tax deductible?

If you manage your own property, you’ll be able to deduct many operations and lower your tax bill. If you delegate the job to a management firm, all expenses related to paying them are usually deductible.

You’ve learned about management fees as a whole, what to expect when paying a management firm, what to watch out for, and what it’ll be like to possibly do it on your own. We also covered the importance of reading your contract, what you choose to delegate – depending on your personality and managerial style – and what’s considered a fair rate for hiring a property management firm.

*Disclaimer

Investing in commercial real estate can be risky. It is not a fit for everyone. While we aim to provide general information to help you better understand CRE investments, we are neither providing any investment advice nor advising for or against any particular investment.