Question

6. Jim Hilbert bought a vacation condominium as a real estaterental property for $350,800. After a $90,000 down payment,he mortgaged the rest. His annual expenses totaled $29,790and he rented the condo for $3,200 per month.a. What is the annual net income?b. What is the annual yield?c. What monthly rent would he have to charge to get ayield of 11%?

Answer 1

Given:

Jim Hilbert bought a vacation condominium as a real estate rental property for $350,800. After a $90,000 down payment, he mortgaged the rest. His annual expenses totaled $29,790 and he rented the condo for $3,200 per month.

Required:

a. What is the annual net income?

b. What is the annual yield?

c. What monthly rent would he have to charge to get a yield of 11%?

Explanation:

Rent of the property = $350,800

Downpayment