Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Consider the following potential investment. A 40-unit apartment building, built in 1980, is listed for sale at a 7.5% cap rate. Assume there are 30
Consider the following potential investment. A 40-unit apartment building, built in 1980, is listed for sale at a 7.5% cap rate. Assume there are 30 two-bedroom units and 10 three-bedroom units. The two-bedroom units rent for $1,000 per month with one-year leases. The three- bedroom units rent for $1,200 per month. The property has a current vacancy rate of 5% for the three-bedroom units and 5% for the two-bedroom units. An additional income source is laundry services of $10,000 per year. Operating expenses are 50% of effective gross income. Determine the following and show your work. a. Gross Potential Rent for the year. b. Vacancy Amount in $'s. c. Effective Gross Income d. Net Operating Income e. Calculate the listing price
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started