Understanding Cap Rates and ROI in Commercial Real Estate
Investing in commercial real estate can be a lucrative way to build wealth, but success hinges on understanding the key metrics that determine a property’s profitability. Two of the most critical financial indicators are the Capitalization Rate (Cap Rate) and Return on Investment (ROI). While often used interchangeably, they serve different purposes and provide unique insights into a property’s financial performance. Let’s break down what they mean and how they differ. What…
