Question: I need urgent help with an assignment! Please help me! Best answer gets a thumbs up! Can someone please help me answer this HW question?

I need urgent help with an assignment! Please help me! Best answer gets a thumbs up! Can someone please help me answer this HW question? The best answer is guaranteed a thumbs up!

Can someone please help me answer this HW question? The best answer is guaranteed a thumbs up!

A town home in West LA is listed for sale at $800,000. Assume:

  • You have enough money to make a 20% down payment and finance the purchase of the town home with a fully amortizing mortgage loan at 4% for 30 years.
  • Property value and rental growth rates are expected to be 3% per annum.
  • Insurance and maintenance are expected to be 500$ each in the first year.
  • Expenses are expected to grow at 3% per annum.
  • Marginal tax rate is 28%.
  • Property tax rate as a % of home value is 1.5%
  • You expect to own the town home for 5 years
  • The selling expenses are expected to be 5%.
  • A similar town home can be rented for $2000 per month.
  • Please provide:
  • A rent versus own analysis
  • A cash flow analysis

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