Understanding Income from Property.

January 31, 2020

To understand income from investment properties first you need to look at the types of Rents and Leases.

Not all commercial rents and leases are the same. to understand income from your investment property you should know that there is the contracted rent, anticipated rent, and market rent. There is also percentage rent, overage rent, and surplus rent. Then there is the question about what expenses is the tenant responsible for and what is paid by the landlord? These questions are addressed in the type of lease.

Leases can be broadly classified into 3 categories under a fixed Expenses lease the landlord is obligated to pay all or most of the property's operating expenses and real estate taxes. A variable Expenses lease the tenant pays all property operating expenses in addition to the stipulated rent. And under a Triple-Net (Net-Net-Net) Lease the tenant assumes all expenses of operating a property, including both fixed and variable expenses.

The type of lease and rent will determine your income stream. Is it A Constant Perpetual Income Stream? A Constant Terminal Income Stream? Variable income stream? or a Reversion?

In this video you will also find out about the Components of an Income Stream and what Return OF Investment and Return ON Investment mean in commercial real estate investing.

If you have questions or need more information, please feel free to call Pri @ 614-450-2510. If you are looking to invest in Ohio, let us talk!

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