$50,000 (80% of $62,500) for 10 years would be a monthly payment (principle and interest) of $568

$75,000 (80% of $94,000) for 10 years would be a monthly payment (principle and interest) of $852

$100,000 (80% of $125,000) would be a monthly payment (principle and interest) of $1135

You have enough cash in savings to make any of these down payments. You have also done your research to find out the following:

Normal vacancy rates run about 10% of maximum possible monthly rental income. You should assume that your vacancy rates would approximate this norm.

Maintenance of the facility typically runs about 5% of maximum possible monthly rental income and you should be able to expect this to hold true for you. Ima uses a local handy man for maintenance, and her maintenance expenses still fall within the 5% range.

Taxes and insurance run about $400 per month

Advertising including maintenance of the website typically runs about $150 per month. Ima really hasnt done much advertising.

Answer the following questions in the space immediately below each question. The answer space will enlarge to accommodate your answer. Once you have answered all the questions, save the file and submit it in the space provided in the assignment. See rubric for grading measurements.

1. Complete the following tables. Answers should be annual NOT monthly (30 points)

Large units- maximum possible annual revenue without vacancy rate		Large units- maximum possible annual revenue assuming vacancy rate
Medium units- maximum possible annual revenue without vacancy rate		Medium units- maximum possible annual revenue assuming vacancy rate
Small units- maximum possible annual revenue without vacancy rate		Small units- maximum possible annual revenue assuming vacancy rate
Annual possible gross revenue (assume vacancy rate)
Estimated annual vacancy rate (cost of vacancies)
Estimated annual maintenance
Estimated annual taxes and insurance
Estimated annual advertising
Total annual estimated expenses

Purchase price	$62,500	$94,000	$125,000
Annual mortgage expense
Estimated annual net profit or loss (assume vacancy rate)