Question

19. An investor has purchased a property that is giving him a 10% rate of return. Potential gross rents total $10,000.00 a month. Expenses for the property total $47,570.00 per year. The property has a vacancy rate of 8%. What is the market value of the property

Answer 1

Answer:

the market value of the property is $628,300

Explanation:

The computation of the market value of the property is shown below;

Gross rent $10,000 × 12= $120,000

Now

= $120,000 ×  .92 (occupancy rate)

= $110,400

After that

= $110,400 - $47,570

= $62,830

And ,finally the market value of the property is

= $62,830 ÷ 0.10  

= $628,300

hence, the market value of the property is $628,300