Of House Prices…

Just dug this out from The Economist Online (originally published in print on September 9, 2004)… Can’t help but wonder what kind of yields these index values correpond to; in other words, if someone bought a house today and rented it out tomorrow, what kind of current income would they be receiving?

Since the question seems difficult to answer directly, can there be a clue in the world of publicly traded companies?

A quick look at AIMCO, a large apartment building operator, reveals book assets of $10 billion and operating income of $329 million; operating yield, therefore, appears to be just above 3%. This doesn’t look like a lot…

Of course, the approximation is crude, but is there a better one?

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