Question

Felice bought a duplex apartment at a cost of $235,000. Her mortgage payments on the property are $1,510 per month, $803 of which can be deducted from her income taxes. Her real estate taxes total $2,304 per year, and insurance costs $1,452 per year. She estimates that she will spend $1,446 each year per apartment for maintenance, replacing appliances, and other costs. The tenants will pay for all utilities. What monthly rent must she charge for each apartment to break even

Answer 1

Answer:

$1,032

Explanation:

Calculation to determine What monthly rent must she charge for each apartment to break even

First step is to calculate the Monthly costs using this formula

Monthly costs = Mortgage payment + Real estate taxes + Insurance costs + Maintenance costs

Let plug in the formula

Monthly costs=$1,510 + ($2,304 / 12) + ($1,452 / 12) + [2 ×($1,446 /12)]

Monthly costs= $1,510 + 192+ 121 + 241

Monthly costs= $2,064

Now let calculate the Break-even monthly rent per apartment

Using this formula

Break-even monthly rent per apartment = Monthly costs / 2

Let plug in the formula

Break-even monthly rent per apartment = $2,064 / 2

Break-even monthly rent per apartment = $1,032

Therefore What monthly rent must she charge for each apartment to break even will be $1,032