What is the required monthly leasing cost for each unit

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Reference no: EM132160935

Question: A 30-unit apartment building should last 35 years, when it will need to be either replaced or undergo major renovation. Assume the building's value at 35 years will be 10% of its construction cost. Assume it will be sold, and that the land's cost will be recovered in full.

(a) If the owner wants a 15% rate of return, what is the required monthly leasing cost for each unit?

(b) If turning 2 units into an exercise facility would decrease the vacancy rate by 5%, would that be a good decision?

Reference no: EM132160935

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