You recently bought a home M7.5 Discussion: Considering the Possibilities in Your Own Backyardwith a structure distant from the main house. This area was used as an art studio by the previous owner. It has plumbing and electricity and is near the back of the property, where it is possible to construct a second entrance and set up sheltered parking. You are considering renovating this to use as a rental property. The structure is large enough for four rental units. You have already established agreements to lease these units; however, revenue will be irregular because you live in a resort area where residence is not continuous. Crime and vandalism (and thus risk of loss and repair) are low, and you believe this is a low- to medium-risk investment compared to the standard range of assets you could otherwise invest in. It will take you two years to complete the necessary renovations. In speaking with others with small investments in real estate similar to this one, you have learned that a typical rate of return on property rentals is 11 percent. You think of this as a "required rate of return" on the project. You will feel comfortable making this investment