Expected Equity Returns on Real Estate Financed with Life Insurance Company Loans: 1967–1977

This paper estimates the internal rate of return on eleven real property types for the period 1967–1977 using a national sample of over 39 billion dollars worth of real property. Returns are calculated four ways—1) before tax, before financing. 2) before tax, after financing, 3) after tax, before financing, and 4) after tax, after financing. Comparisons are then made to determine the effects of taxes and financing on the returns. Finally, the results are compared to an earlier study for the period 1954–1966 to determine the changes of the various factors over time.