Part 5

A rental home recently sold for $342,000. It rents for $1,800 per month. A nearby home rents for $1,500 per month. What would you expect this nearby home to be worth?

$285,000.

An investment earns semi-annual interest of $360, and the interest rate is 9% per year. How much money is invested?

$8,000

An $80,000 property has a gross income of $10,000 a year. Management fees are $700 annually, and utility costs are $92 per month. What is the approximate rate of return?

10.25%

An owner receives $175 per week of gross income from each of 10 apartments and pays $2,400 in monthly expenses. What is the rate of return on the investment of $600,000?

10.4%.

An investor purchased a property for $300,000, taking out a $250,000 loan. The property generates $30,000 of annual income. The only expense is an interest-only payment of 7% interest on the loan. What is the investor's return on equity?

25%

An owner receives $37,500 per year net income on an investment of $495,000. What is the owner's capitalization rate?

7.6%

An apartment house owner receives $4,800 per year net income from his investment of $60,000. What is his annual rate of return on this investment?

8.0%

An office building producing a gross annual income of $45,000 is purchased for $225,000. If the only expense is an 11.5% interest payment on a $200,000 term loan, what is the owner's rate of return on equity?

88%