What is the formula for healthcare yield from an investor's perspective?

To determine healthcare yield from an investor's perspective, the correct formula is derived from the relationship between property value, market yield, and required rent. Specifically, the required rent reflects the return on investment that an investor expects based on the property's value and the prevailing market yield.

The formula states that required rent is equal to the property value multiplied by the market yield. This relationship makes sense when considering that an investor wants to achieve a certain yield on their investment. By multiplying the property value by the market yield, the result provides the amount of rent that should be charged in order to achieve that desired yield.

For example, if an investor owns a property valued at $1 million and the market yield is 5%, the required rent would be $1 million multiplied by 0.05, which equals $50,000 annually. This amount reflects the return that the investor seeks based on the asset's value and the risk associated with the real estate market.

This formula also effectively captures the dynamics of real estate investments, where the value of the property and the yield interplay to inform rental pricing strategies. Hence, this approach is crucial for investors in determining viable returns in the healthcare sector and beyond.