The asking price is $$450,000.$

There are $10,000$ square feet of leasable area.

The expected rent is $$5$ per square foot per year; rents will increase $5$ percent per year. The $5$ percent rent bumps will occur at the end of each year. Since the property is leased to an AAA$-$grade tenant for $25$ more years, no vacancy factor is deducted.

The tenant will pay all operating expenses except property taxes and insurance. These two expenses will equal $20$ percent of the effective gross income $($EGI$)$ each year.

The investor can borrow $80$ percent of the total cost for $10$ years at an interest rate of $7$ percent with monthly payments and total upfront financing costs equal to $3$ percent of the amount borrowed. Payments will be based on a $20-$year amortization schedule.

$85$ percent of the total acquisition cost is depreciable over the useful life of $39$ years using the straight$-$line method $($no personal property$).$ Ignore the mid$-$month convention.

The investor expects to sell the property at the end of year $5.$

The investor$$s ordinary income tax rate is $30$ percent.

No capital expenditures have been made since acquisition.

Required:

Compute the after$-$tax cash flows from annual rental operations over the five$-$year housing period.