ben buys a hotel for $975k, lives there for exactly 10 years and sells it.

Suppose bens annual cost of ownership is exactly equal to the annual rent she would have paid to live in the same hotel.

Suppose the price of bens hotel grows 3.5% annually.

Compute bens annual IRR from owning net of renting.

(hint: look at the buy vs rent slides, assume no mortgage or buying/selling expenses.)

2. ben buys a hotel for $975k, lives there for exactly 10 years and sells it.

Suppose bens annual cost of ownership is exactly equal to the annual rent she would have paid to live in the same hotel.

Suppose the price of bens hotel grows 3.5% annually.

Buying expenses are 5% of purchase price and selling expenses are 8% of sale price.

Compute bens annual IRR from owning net of renting.

(hint: look at the buy vs rent slides, assume no mortgage.)