5 Problem 17-6 Calculating Profit or Loss on a Rental Property [LO17-1] Felice b

Question

5 Problem 17-6 Calculating Profit or Loss on a Rental Property [LO17-1] Felice bought a duplex apartment at a cost of $215,000. Her mortgage payments on the property are $1,020 per month, $516 of which can be deducted from her income taxes Her real estate taxes total $1,452 per year, and insurance costs $1,224 per year. She estimates that she will spend $1,548 each year per apartment for maintenance, replacing appliances, and other costs. The tenants will pay for all utilities. 10 points Ask What must she charge to make $4,600 in profit each year? (Do not round intermediate calculations. Round your answer to 2 decimal places. Ignore any tax effects.) Print Rent per apartment References

Explanation / Answer

Net mortgage payment=1020-516=504
Taxes=1452
Insurance=1224
Maintenance=1548
Total payments=504+1452+1224+1548=4728
Profit=4600
hence, Charge per year-Payments=Profit
=>Charge per year=4600+4728=9328

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