Real estate builds wealth in ways few other investments can—through monthly cash flow and long-term appreciation. But understanding how appreciation is measured is critical to making smart decisions. In residential real estate, values typically rise (or fall) based on comparable sales—what similar houses sell for in the neighborhood. That means your appreciation is tied to market sentiment and buyer demand.
In commercial and multi-family investments, however, values are driven by the income approach—the property’s Net Operating Income (NOI) and market cap rates. This gives investors more control over appreciation because increasing rents, reducing expenses, or improving operations directly increases the property’s value, regardless of nearby sales activity.
That’s why I help investors focus on real after-tax returns, factoring in annualized IRR, depreciation, and expense write-offs—targeting properties where you can influence the value, not just hope the market goes up. Let’s find your next income-producing asset that builds wealth in today’s market, not yesterday’s.
