6. What is your return on equity from appreciation? 7. Let's assume a 5% appreciation per year for your house. How much EQUITY will you make this year? In other words, by how much will your home value increase? 8. Out of your mortgage payment to the bank (question number 1), lets say 50% of your payment goes to interest, and 50% goes to principal (paying down the loan). In one year, how much more of the home value do you own? Focus on the principal side for this one. 9. Let's assume you make $60,000 per year from your income. How much money would you save in taxes from deducting your mortgage interest this year? Use the 50% interest from problem 7. 10. Lets say 80% of the home is the structure, and 20% is the land. How much would you save in taxes in one year due to depreciation? 1. Choose a neighborhood, city, etc. Go to Zillow and choose a house that has a price between $400,000 to $1,000,000. Then, use the Zillow mortgage caiculator to determine how much money per month you would pay with a 30 year fixed loan at 6% interest. Do NOT forget all other costs on the calculator. How much is your overall house price $885,000 monthly payment? escobar dr. san Diego monthly payment - $5,286 2. Next, in the same neighborhood, see how much a similar house/apartment is renting for. This means you are looking for something similar to the house you chose in question 1. Similar means having a very similar square footage, same number of bedrooms, bathrooms, and other features such as garage, deck, back/front yard, pool, etc. How much are similar homes renting for per month? $4,950/mo 3. Now is the time to determine how much money you should charge for rent based on the other similar homes in your neighborhood. You have to charge something similar, not too low or too high from the other similar homes, however, something that should cover your mortgage. How much will you charge for rent in your house? $5,000 4. Based on your answer in problem number 3, how much money would you make per month from collecting the rent? How much money would you make per year collecting the rent? 5. What is your return on cash? Hint, it is a percentage