. You can sell the home today for $530,000. Mortgage balance is $250,000. Assume that the selling expenses amount to 6% of the selling price. There is an emotional component to selling the house because it is the first house you ever owned. 2. You can find a long-term renter to occupy the house. This is a great home for a family to live in a great neighborhood. Monthly expenses (mortgage P&I, taxes) = $1650. Assume that all utilities (water, gas, sewer, garbage, electricity, yard) will be passed on to the renter. Assume that the only expenses you will incur to get the house rent-ready is carpet cleaning. The house is in the Bellefonte School District, not the State College School District. Also, the house is a bit farther from the amenities in State College, but not too far from Sams Club or Walmart. 3. You can list the home on Airbnb for football games and graduation. Monthly expenses (mortgage P&I, taxes, utilities) = $1900. The home will be fully furnished and will likely cost $5000 to get it fully stocked and ready to rent out to visitors. Task: Which of the following strategies should you? First you need to come up with a quantitative analysis on the best option. Provide analysis for a 3-, 5-, and 7-year holding period. At the end of each holding period, you will sell the house in options 2 and 3. The first thing you need to do is make assumptions about how much you can collect in rent per year. Use resources like Zillow or Trulia to figure out what it should rent for. The house is 4 beds, 2.5 baths, 2000 square feet, newly built. Next you will need to figure out how much it will rent for on Airbnb per night. Look at houses available for next football season or graduation to see what comparable properties rent for. Assume you will be able to rent it out for 7 football games and 2 graduations, for 2 nights each. Feel free to assume additional nights to rent it out if you would like, but justify those decisions. Assume Airbnb + cleaning accounts for 15% of the nightly rate in expenses. Your objective is to come up with a quantitative analysis of your options. Assume a growth rate of 5% per year for rent and nightly rate. Assume an 8% required rate of return, which is the interest rate that you will get if you sell the house in option 1 and get a new mortgage. If it looks like options 2 and 3 do not work, what would the monthly rent and nightly rate have to be in order to make it work?