Fight Finance

Courses  Tags  Random  All  Recent  Scores

Scores
keithphw$5,631.61
an4_bolt$4,086.43
youngthu...$2,449.43
Visitor$800.00
Visitor$690.00
Visitor$620.00
Visitor$520.00
Visitor$500.00
Visitor$490.00
Visitor$490.00
Visitor$470.00
Visitor$460.00
Visitor$420.00
Visitor$420.00
Visitor$408.00
Visitor$370.00
Visitor$370.00
Visitor$370.00
Visitor$340.00
Visitor$320.00
 

Question 362  income and capital returns, DDM, real estate

Three years ago Frederika bought a house for $400,000.

Now it's worth $600,000, based on recent similar sales in the area.

Frederika's residential property has an expected total return of 7% pa.

She rents her house out for $2,500 per month, paid in advance. Every 12 months she plans to increase the rental payments.

The present value of 12 months of rental payments is $29,089.48.

The future value of 12 months of rental payments one year ahead is $31,125.74.

What is the expected annual capital yield of the property?




Copyright © 2014 Keith Woodward