ent] In the equations above, the reason that the values are divided by two is that it is assumed that half spent on expenses other than debt repayment. The rental yield expected on the commercial property is 7.4409% while the expected yield on the residential property is 8.1486% Based on their respective rental yields, the rental homes tract is the better investment. The loan-to-value (LTV) for the office building is Another indicator of their relative attractiveness as an investment is each property's price-to-rent ratio. The office building has a price-to-rent ratio of while the corresponding ratio for the rental homes tract is . Based on this data, the is the better investment. From an investor's perspective, a negative conclusion associated with an overly large ratio is that it suggests that property prices are very Similarly, a discouraging explanation for an overly ratio is that rents and market prices are so close in value that a financially astute investor would rather a given property. , Q Search " but is or of the rental income is for the rental homes tract. Assume that your expected annual operating costs-excluding your annual depreciation expense-for the commercial property will be 35% of your annual rental income. For the residential property, the annual operating costs (excluding depreciation expense) will be 20% of your annual rental income. The interest rates of the mortgages for the commercial and residential lease properties are expected to be 6% and 4%, respectively. Given your other assumptions, complete the following two tables and then use your computations to answer several questions. Round all amounts to a 5:22 PM 11/27/2023