Analyzing return involves which of the following combinations?

Analyzing return in the context of real estate investments involves examining both the return OF the investment and the return ON the investment. The return OF the investment refers to the initial capital that is being invested, while the return ON the investment encompasses the income and profits generated from that capital over time.

When investors evaluate real estate, they must assess how much of their initial investment is being recovered (return of) and how much profit is being generated (return on). This comprehensive analysis allows investors to gauge the overall performance of their investment and make informed decisions about future investments or divestments.

Understanding both aspects is crucial for a complete financial picture. For instance, just focusing on the return of the investment would overlook the ongoing income generated from rental activities, appreciation of property, and other profit-making avenues, which are vital for assessing the viability and desirability of an investment. Conversely, analyzing only the return on the investment ignores the integration of the original capital, which is essential for calculating net profitability and total returns over time.