Question

Single-year return measures and ratios that are widely used by real estate investors can be grouped into 3 categories:______

Answer 1

The single-year return measures and ratios widely used by real estate investors can be grouped into 3 categories: cash flow measures, capital appreciation measures, and total return measures.

Step-by-step explanation:

The single-year return measures and ratios widely used by real estate investors can be grouped into 3 categories: (1) cash flow measures, (2) capital appreciation measures, and (3) total return measures.

1. Cash flow measures focus on the cash generated by the real estate investment in a single year. Examples include net operating income (NOI), cash-on-cash return, and capitalization rate.
2. Capital appreciation measures examine the increase in the value of the real estate investment over a single year. Examples include price appreciation, equity growth, and internal rate of return (IRR).
3. Total return measures combine both cash flow and capital appreciation to provide a comprehensive view of the investment's return. Examples include return on investment (ROI), modified internal rate of return (MIRR), and return on equity (ROE).