People usually make a huge mistake when investing into commercial investment property. They tend to forget a simple thing and that is the word NET and it is not the Gross.

Here is a simple equation: take the total rents and other income, then subtract the total expenses and the result will be the Net Operation Income (NOI). This is the only that defines the value of the investment property.

There are also other benefits of being a commercial property investor. These are loan principal reduction and property appreciation. There are also tax advantages in owning a commercial building through depreciation that depends on your tax circumstances. These benefits are surely great but the primary focus of a commercial property investor is the NET or the Net Operating Income.

An investor must always keep in mind that it is not all about the beautiful colors of a building. It is not also about the garages, balconies, TV room or the new maintenance-free siding – although these features adds attraction to the property – but what is more important are the numbers you can get from the property. It is the NET.