英文摘要 |
The paper tries to explore the degree to which the realized rate of return from rentals is affected by the gross rental income and financial leverage of investors. The paper finds that the realized rate of return from rentals will not just increase due to higher gross rental income, but will be affected by the level of the financial leverage of investors. The model presented in the paper can explain why the investors are willing to accept lower rental income or higher property prices. The paper further shows that when the mortgage rate is high, investors tend to demand higher gross rental income or lower property prices. In addition, under different levels of gross rental income and financial leverage, investors can increase their expected leveraged rate of return from rentals. |