Question: PLEASE ASSIST ME WITH THE DATA ALSO

Assume you buy your house today with the same interest only loan, keep it for a limited time:

(a) If you buy this property at the asking price and sell after 10 years, what is the NPV of your investment with 6% after tax discount rate? What is the IRR?

(b) If you sell after 5 years, what would be the NPV and the IRR?

Property Details

Bedrooms

Bath

Sq. Footage

Lot Size

Avg. Rent 5,500.00

Avg. Sale 1,500,000.00

Assumptions

Rent Inflation 3.00%

House Annual Growth 3.00%

Maintenance 1.00%

Maintenance Inflation 1.00%

Property Tax 1.25%

Property Tax Inflation 2.00%

Closing Costs 1.00%

Required Rate Return 6.00%

Down Payment 20.00%

Interest Rate Mortgage 3.50%

Federal Tax Rate 35.00%

State Tax Rate 9.30%

Seller Cost (Agent Fees) 6.00%

• NPV = - (Purchase Price + Closing Costs) + ((Rent - Maintenance)/(r - Rent Inflation)) - (RE Tax/(r-Growth Tax)