Calculate IRR assuming sale of property in 5 years Purchase price $300,000 Initial Rent $26,000 Rental growth
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Calculate IRR assuming sale of property in 5 years
| Purchase price | $300,000 | |
| Initial Rent | $26,000 | |
| Rental growth rate | 2.00% | |
| Vacancy rate | 10.00% | |
| Property growth rate | 2.00% | |
| Insurance | $1,000 | |
| Maintenance | $1,000 | |
| Expense growth | 2.00% | |
| Marginal tax rate (no benefit) | 0.00% | |
| Property tax % | 1.50% | |
| Selling expenses | 7.00% |
| Loan Information: | ||
| Loan-to-value ratio | 80.00% | |
| Loan amount | $240,000 | |
| Interest rate | 4.50% | |
| Loan term (years) | 30 | |
| Payments (per year) | 12 | |
Assume tax exclusion on Capital Gains of $250,000 | ||
Expert Answer:
To calculate the Internal Rate of Return IRR for the property investment we need to consider the cas... View the full answer
Related Book For 
Spreadsheet Modeling and Decision Analysis A Practical Introduction to Business Analytics
ISBN: 978-1285418681
7th edition
Authors: Cliff Ragsdale
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