Most real estate investors learn about capitalization rate (cap rate) early on—and for good reason. It’s a useful, at-a-glance measure of a property’s income in relation to its market value.
But cap rate has its limitations: it reflects only a single year of net operating income (NOI), ignores financing, and says little about long-term performance. It looks at a property at a point in time, not over the long term.
If you’re serious about evaluating income-producing real estate—especially in a competitive or uncertain market—you need to go deeper. In this article, I’ll walk you through five advanced metrics that provide a more comprehensive and strategic view of a commercial investment’s potential. Ready for that deeper dive?
