You are considering the purchase of a rental property.

The property rents for $1,800 a month,

garage parking is $80 a month.

The property and garage space are expected to be rented 85% of the year.

Additional expenses associated with the property include:

Real estate taxes of $1,200 a year

Liability insurance of $1,000 a year

Advertising expense of $600 a year

Maintenance costs of $1,100 a year

Depreciation of $2,800 a year

Interest expense on the property loan of $5,000 a year.

If your required rate of return on the property is 6%, what is the intrinsic value of the property?

		$254,600
		$207,933
		$124,600
		$319,600