The ____ is a computation of how much income the investor might pocket from rent each year before mortgage payments as a percentage of the purchase price.

Question

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Rental yield is the computation of rental income as a percentage of the purchase price, without taking into account mortgage payments. A is incorrect because it refers to the actual income earned, including mortgage payments. B is incorrect because cash flow takes into account the difference between income and expenses, which includes mortgage payments. D is incorrect because price-to-rent ratio compares the price of the property to the annual rent it generates, without taking into account the actual income earned by the investor.

The ____ Is a Computation of How Much Income the Investor