REI Posts

Knowing the value of a commercial property isn’t as simple as checking a listing—it usually involves a professional appraisal or a careful analysis using several methods. Here’s a clear breakdown: 1. Common Methods to Value Commercial Property Method How it Works Best For Income Approach (Cap Rate) Value = Net Operating Income ÷ Capitalization Rate. … Read more

The value of a commercial property is typically calculated using one of three main approaches: Income Approach, Sales Comparison Approach, or Cost Approach. The Income Approach is most common for income-producing properties. Here’s the basic formula: 1. Income Approach (Capitalization Method) This approach is based on the property’s ability to generate income. Formula: Commercial Property … Read more

A commercial appraisal typically takes 1 to 4 weeks, depending on the property type, size, and complexity of the appraisal. Here’s a simple breakdown: Factor Typical Timeframe Notes Small commercial property (e.g., retail strip, small office) 1–2 weeks Less data and fewer comparable sales needed Medium commercial property (e.g., mid-size office, industrial) 2–3 weeks More … Read more

The cost of appraising a commercial property varies based on factors such as property type, complexity, location, and the purpose of the appraisal. Here’s a general breakdown: 💰 Typical Cost Ranges These estimates are based on national averages and can vary depending on specific circumstances. 📊 Factors Influencing Cost Several elements can impact the cost … Read more

A good commercial lease length really depends on your goals as a tenant or landlord, the type of business, and the local market, but here’s a breakdown: Lease Type Typical Length Pros Cons Short-Term 1–3 years Flexibility to move, lower long-term commitment, easier to renegotiate Higher rent per month, less stability, landlord may prioritize renewals … Read more

When it comes to commercial property, ROI (Return on Investment) can vary widely depending on the property type, location, market conditions, and investment strategy. Here’s a simple breakdown: Property Type Typical ROI (Annual) Notes Office 6–12% Prime locations may be lower but stable; secondary markets can be higher but riskier Retail 6–10% Depends heavily on … Read more

Calculating the value of a commercial property involves analyzing multiple factors. There are three main approaches appraisers and investors use: Income Approach, Sales Comparison Approach, and Cost Approach. Here’s a breakdown: Approach How It Works When It’s Used Income Approach Uses the income the property generates (rent, leases) to estimate value. Formula: Value = Net … Read more

For commercial property, the party who pays for the appraisal is usually the buyer, but it can vary depending on the situation: Situation Who Pays Notes Purchase with a bank loan Buyer Lenders usually require an appraisal to approve the loan; buyer pays as part of closing costs. Refinancing Property owner / borrower The lender … Read more

The most common appraisal method for commercial property is the Income Approach, especially for income-producing properties like office buildings, retail centers, and apartment complexes. Here’s a quick breakdown of the three main methods: Method Description When It’s Used Income Approach Values property based on its income-generating potential (net operating income ÷ capitalization rate). Most common … Read more

The 3-day appraisal rule isn’t a formal law but rather a guideline used in some real estate or mortgage contexts. It generally refers to the idea that an appraisal report is considered most valid if it’s no more than three days old when used for a transaction, especially for fast-moving markets or when the lender … Read more