What percentage represents the gross return for a property valued at $430,000 and generating a gross annual rent of $20,280?

What percentage represents the gross return for a property valued at $430,000 and generating a gross annual rent of $20,280?

• A. 4.0%
• B. 4.7%
• C. 5.2%
• D. 3.8%

Answer: (B)

To determine the gross return for a property, you can use the formula: Gross Return = (Gross Annual Rent / Property Value) x 100 In this case, the property is valued at $430,000, and it generates a gross annual rent of $20,280. Plugging these values into the formula gives: Gross Return = ($20,280 / $430,000) x 100 First, calculate the division: $20,280 ÷ $430,000 = 0.047184 Next, multiply by 100 to convert this decimal into a percentage: 0.047184 x 100 = 4.7184% When rounded to one decimal place, this percentage is 4.7%. This is why the choice that reflects this calculation accurately aligns with the gross return for the property. The answer represents the ratio of income generated to the total investment, which is a key measure for evaluating the performance of a property investment.

To determine the gross return for a property, you can use the formula:

Gross Return = (Gross Annual Rent / Property Value) x 100

In this case, the property is valued at $430,000, and it generates a gross annual rent of $20,280. Plugging these values into the formula gives:

Gross Return = ($20,280 / $430,000) x 100

First, calculate the division:

$20,280 ÷ $430,000 = 0.047184

Next, multiply by 100 to convert this decimal into a percentage:

0.047184 x 100 = 4.7184%

When rounded to one decimal place, this percentage is 4.7%. This is why the choice that reflects this calculation accurately aligns with the gross return for the property. The answer represents the ratio of income generated to the total investment, which is a key measure for evaluating the performance of a property investment.