Profitability
(Annual rent *100) / full value of the property
Normal profitability of residential real estate: 7-8%, commercial - 9-10%
Profitable investment: 12-15%
Return on rental = full value of real estate / annual rent
As example:
Full cost (costs for repair and taxes included): $500,000
Rent (costs and taxes included): $3,000/month ($36.000/year)
Return on rental: $500,000 : $36,000 = 13.8 years
Profitability: $36,000 *100 / $500,000 = 7.2% per annum