3) Richard Rosendahl is looking to buy investment property. He spots a house listed for $400,000 that he thinks he could sell for $450,000 in exactly 5 years. He also thinks that he could charge monthly rent of $2,250 and have the property occupied for the full 5 years, and that expenses (which include taxes/depreciation and everything else) would be consistent with the basic formula in the book. The real estate commission in the area is the standard 6%. The appropriate discount rate is 7%. What is the most that Richard should be willing to pay for the house?

There is no Expense Ratio given with the problem.