Calculate the debt yield ratio

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Suppose you are considering the purchase of an apartment building that has 15 units that can be rented out at $1,250 per month. You have estimated operating expenses and expected vacancy and collection losses for the first year to be $39,000 and $33,000, respectively. You also have estimated that you will be able to generate an additional $4,000 in the first year from garage rentals on the property. If the expected purchase price of the property is $1,250,000 and you are planning on making a 20% down payment, calculate the debt yield ratio.

Reference no: EM131620289

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