REI Wealth Monthly Issue 02 | Page 8

TOP 5 REASONS TO CONSIDER COMMERCIAL REAL ESTATE INVESTING JEREMY CYRIER understand how to make money investing, the fewer people will waste your time on low value activities and deals. Reason #3: Because each property is like a business. Businesses, like commercial real estate, are valued on income. When you invest in residential real estate, you worry about recent comparables because you don’t want to over-improve a home out of fear that it won’t appraise. Commercial real estate is valued on how much net operating income the property generates. (Net operating income is equal to the gross income less vacancy and operating expenses.) For instance, when you incre