What type of basis does NPI return calculations use?

NPI, or the National Property Index, utilizes an unleveraged basis for its return calculations. This means that the returns are calculated without taking into account any debt financing or leverage that might be involved in property investments. The rationale behind using an unleveraged basis is to provide a clearer picture of the asset's performance purely based on its fundamental characteristics, such as rental income and property value appreciation, without the distortion that leverage can introduce.

By focusing on the unleveraged performance, investors and analysts can make more direct comparisons between different properties or investment opportunities, as it removes the variable of how each investment might be financed. This basis allows for a true assessment of the operational efficiency and potential returns of a property, independent of the financial strategies employed by different investors.

The other options pertain to different methodologies or considerations that are not applicable to NPI’s standard return calculations. Leveraged basis involves taking debt into account, which would skew the performance calculations. Tax-adjusted basis introduces tax impacts, while appraised basis centers on the valuation methods used to assess property worth, neither of which is the focus for NPI return calculations.