Assume you buy your house today with a fixed rate interest only loan, and keep the property

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Assume you buy your house today with a fixed rate interest only loan, and keep the property indefinitely.

(a) If you buy this property at the asking price, what is the NPV of your investment with 6% after tax discount rate?

(b) What is the IRR?

Property Details Bedrooms 3-4 Bath 2 Sq.

Footage 2,000.00

Lot Size 5,000.00 Avg.

Rent 6,500.00

Avg. Sale 1,500,000.00

Assumptions Rent Inflation 3.00%

Maintenance 1.00%

Maintenance Inflation 1.00%

Property Tax 1.25%

Property Tax Inflation 2.00%

Closing Costs 1.00%

Required

Rate Return 6.00% Down Payment 20.00% Interest Rate Mortgage 3.50% Federal Tax Rate 35.00% State Tax Rate 9.30%

Posted Date: Sep 09, 2021 07:50 AM

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Assume you buy your house today with a fixed rate interest only loan, and keep the property

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