How many years would you need to own the property

Assignment Help Finance Basics

Reference no: EM131928224

Question: You are deciding whether to own or rent a single family residence. You could rent the property for $3,100 a month, or you could buy the property for $550,000 and finance it with a 70% LTV fixed-rate fully amortizing 30 year mortgage at 4%. You expect an annual appreciation rate of 3%, maintenance and insurance at currently $2,500/year and increase by 2% a year, you have a 33% marginal tax rate Selling costs would be 7% of the sale price and property taxes are 2% of current property value. How many years would you need to own this property in order to generate a positive IRR? (Round to the nearest year)

Reference no: EM131928224

Questions Cloud

Compute the cost of ending work in process inventory : Compute the cost of ending work in process inventory and the cost of units transferred out of the department during June using the weighted-average method.

How much is the quarterly payment : You are considering taking out a loan to invest in a promising nanotechnology firm, which is designing miniaturized robots to repair micro-fractures.

Find the sinking fund deposit : Find the net outstanding balance on the loan at time 5 immediately after the 5th outlay.Find the sinking fund deposit;

Calculate the cost of retained earnings : The All-But-Comatose Corporation (ABC) has Common Stock with a current dividend of $3.20 per share that is selling for $78 per share.

How many years would you need to own the property : You are deciding whether to own or rent a single family residence. You could rent the property for $3,100 a month, or you could buy the property for $550,000.

What is the rate of return that lloyd company will earn : Lloyd Company invested $10,271 in production machinery. What is the rate of return (or interest) that Lloyd Company will earn from this investment

What interest rate assumption have annn : Interest rate for an annuity Personal Finance Problem Anna Waldheim was seriously injured in an industrial accident.

How many units must be sold to yield a profit : Fixed expenses total $120,000 annually. How many units must be sold to yield a profit of $30,000

What is the effect of financing with crypto currencies : What is the effect of financing with crypto currencies (short term) on the capital structure of the company and how would that influence

User Account

All Pages