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A house worth $ 5 5 0 k is expected to earn $ 7 0 k pa gross rent revenue and incur rental costs of

A house worth $550k is expected to earn $70k pa gross rent revenue and incur rental costs of $10k pa over the next year. Note that the units 'k'(Greek kilo) represent thousands. Assume that these cash flows are expected one year from now, so theyre received and paid annually in arrears. If the gross rent revenue and costs increase by -2% per annum (note the negative sign) and houses can be valued as a perpetuity, what is the internal rate of return (IRR) of this house asset? Ignore taxes.

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