Consider alternative financial metrics – NOI doesn’t tell the whole story
Abstract: Real estate professionals approach each transaction hoping to achieve the best possible deal. Often, the first metric they’ll assess is the property’s net operating income (NOI). But this won’t be enough for savvy investors. In most cases, investors need to dig deeper to find the property’s highest and best use. This article examines NOI, as well as two alternative financial metrics worth considering: net present value (NPV) and internal rate of return (IRR).