Gross rent, operating income, and cash are different

A fictional rental property in Japan is offered for thirty million yen. The seller projects annual full-occupancy rent of two million four hundred thousand yen. For this exercise, use ten percent vacancy and collection loss, annual operating expenses of six hundred sixty thousand yen, and annual debt service of one million two hundred thousand yen. Define NOI as effective rent less those operating expenses. Ignore tax, capital expenditure, transaction costs, and changes during the year for the arithmetic task. The brochure calls the gross yield the owner’s guaranteed take-home return. It also claims that the property’s position outside one flood-map zone establishes zero disaster risk. Before purchase, the planner must distinguish these assertions from the exercise assumptions and review title, restrictions, access, physical condition, leases, repair funding, and current local hazard information.