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Commercial properties are a very lucrative business that have helped owners gain wealth and stay prosperous. The more information investors, brokers, agents and contractors have, the better for the industry. With more transparency, the industry functions better and incentives can be aligned easier. With that in mind, property owners may want to

understand how to calculate the total rental income and income per unit of a commercial property.

Rental Revenue Formula

There are several ways to calculate the rental income of a property. ze tian ji The first is to take the total rented square feet and multiply it by the average price per square foot of rental income, times the portion of the year at those prices. Then subtract the expenses.

(Total Square Feet X Price Per Square Foot X Portion of the Year) - Yearly Expenses Using this simple formula, you can calculate the total rental income.

Example

Let's take the example of a commercial property with 100,000 gross square feet and 80,000 square feet that is available to be leased. Perhaps, the agents have only leased 60,000 square feet for the first 6 months of the year and another 70,000 square feet for

the second 6 months of the year. The average price per square foot is $20 during the first six months and $25 during the second six months.

Rental prices are quoted in monthly increments. So during the first six months, the total revenue would be S7.2 million. During the next six months, the total revenue would be S10.5 million. The combined revenue would equal $17.7 million.

Net Rental Income Calculation

To fmd the net rental income, you must subtract the costs to keep the building open and functioning. The first thing is to consider the administration of the building including

security, garbage, management and contractors that fix everything from heating, cooling, electricity to water. the gate of good fortune The cost of all these together might be S3 million including salary and benefits for all.

The next issue to consider is power and water. These utility costs add up for a big

building and may total $2 million. Landscaping, snow shoveling and other external costs may cost another $200,000 over a year.

 

Another big expense is property taxes. These are very difficult to get out of or avoid like other taxes. The value of the land is easy to determine from the government's perspective. Assume that property taxes are $3 million for the building.