Appellate Lawyer Los Angeles, CA
Appellate Lawyer Los Angeles, CA
Net Operating Income and Real Estate Investing
A real estate appellate lawyer Los Angeles, CA trusts will tell you one of the most common ways for investors to build up their nest eggs is by investing in real estate. However, many investors may not realize that having a diverse investment portfolio that provides multiple avenues of income is key to being successful. This can be especially important when dealing with market fluctuations.
Two of the most common real estate investment models are commercial real estate and single-family residential real estate units. A Kassouni Law appellate lawyer in Los Angeles, CA knowledgeable in real estate can provide you with specific legal advice and direction regarding any investment properties you are considering. In the meantime, the following is a brief overview of these two types of options and how you can determine the potential return on investment (ROI) a property offers.
Net Operating Income (NOI)
The net operating income is the annual net income that is generated by the property. To determine the NOI, one must subtract any credit or vacancy losses from the potential income a rental property has. The next step is to add any additional income the property may have. This is referred to as effective rental income. The total is the gross operating income of the property. From this total, the operating expenses are subtracted. This final figure is the net operating income. A real estate appellate lawyer in Los Angeles, CA can assist with these calculations.
One important factor that an investor should keep in mind is that even though a single-family unit can have a net operating income, it generally isn’t considered since leases may be detrimental when it comes to the return amount. The reason for this is that the value of the property is its potential sale – and profit – amount. However, a commercial property’s value is based on what it can be sold for minus any expenses.
Another difference between residential and commercial investment properties when it comes to NOI is that the net operating income can allow a commercial property to make losses or gains, despite what other dynamics of the market may exist. An appellate lawyer in Los Angeles, CA familiar with real estate knows this is why the NOI can play such a critical role in determining whether a piece of commercial property is worth the potential investment.
Contact a Real Estate Attorney from Kassouni Law Today
You don’t need a degree in real estate law to enjoy making a profit in real estate investment. The key is having skilled real estate attorneys behind you making sure due diligence is carried out in researching any potential property issues, all contracts are clear and concise, and all land issues and zoning laws are adhered to properly.
At Kassouni Law, we work diligently to help increase our client’s profits, working diligently alongside our clients through every step of the real estate transaction process. To meet with a real estate appellate lawyer Los Angeles, CA clients recommend, contact our firm today for a confidential consultation.
