Rental yield (%) = [(Annual rent / 2) / Purchase price] x 100 Rental yield (%) = [(Monthly rent / 2) / Purchase price] x 100 Rental yield (%) = [((Monthly rent* 12) / 2) / Purchase price] x 100 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% Based on their respective rental yields, the The loan-to-value (LTV) for the office building is while the expected yield on the residential property is 8.1486% V is the better investment. 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 begative conclusion associated with an overly large ratio is that it suggests that property prices r