Scenario: You are considering investing in real estate-both for the short-term cash flows and the potential long-term capital gains-and are evaluating both a commercial lease property (such as a strip shopping center or an office building) and a residential rental property (such as several rental houses or a small apartment complex). It is likely that you will invest in only one of these properties at this time. The general data regarding these investments is as follows: Expected Rental income Depreciation expense (per year) (per year) $90,008 $7,212 Estimated resale value Price Mortgage Property type Strip shopping center Small apartment complex $915,000 $750,000 $450,000 $420,000 $202,500 $40,810 $5,727 $468,900 The first potential investment consists of a seven-store shopping center, which has a current market price of $750,000. Of this amount, $187,500 represents the cost of the land, and the balance, $562,500, is attributable to buildings on the property. The second possible investment, which costs $450,000, consists of a small four-unit apartment complex. $135,000 of the investment's total price is reflects the cost of land, and the remaining $315,000 is associated with structures on the land. For both properties, you believe you can increase the rents 2% per year for each of the next four years, and expect to sell either property at the end that time. You desire a return of 9% on your investments. One of the more important considerations associated with your investment is a property's potential for generating a positive cash flow. One indicator of a property's likelihood of generating a positive cash flow is the property's rental yield. The best formula for computing a property's rental yield is: Check all that apply. Rental yield (%) = [(Annual rent / 2) / Purchase price] x 100 Rental yield (%) = [(Monthly rent * 12) / (Purchase price / 2)] x 100 Rental yield (%) = [((Monthly rent * 12)/2) / Purchase price] x 100 Scenario: You are considering investing in real estate-both for the short-term cash flows and the potential long-term capital gains-and are evaluating both a commercial lease property (such as a strip shopping center or an office building) and a residential rental property (such as several rental houses or a small apartment complex). It is likely that you will invest in only one of these properties at this time. The general data regarding these investments is as follows: Expected Rental income Depreciation expense (per year) (per year) $90,008 $7,212 Estimated resale value Price Mortgage Property type Strip shopping center Small apartment complex $915,000 $750,000 $450,000 $420,000 $202,500 $40,810 $5,727 $468,900 The first potential investment consists of a seven-store shopping center, which has a current market price of $750,000. Of this amount, $187,500 represents the cost of the land, and the balance, $562,500, is attributable to buildings on the property. The second possible investment, which costs $450,000, consists of a small four-unit apartment complex. $135,000 of the investment's total price is reflects the cost of land, and the remaining $315,000 is associated with structures on the land. For both properties, you believe you can increase the rents 2% per year for each of the next four years, and expect to sell either property at the end that time. You desire a return of 9% on your investments. One of the more important considerations associated with your investment is a property's potential for generating a positive cash flow. One indicator of a property's likelihood of generating a positive cash flow is the property's rental yield. The best formula for computing a property's rental yield is: Check all that apply. Rental yield (%) = [(Annual rent / 2) / Purchase price] x 100 Rental yield (%) = [(Monthly rent * 12) / (Purchase price / 2)] x 100 Rental yield (%) = [((Monthly rent * 12)/2) / Purchase price] x 100