Reference no: EM132395237

Solve these questions:

1. There is an apartment building that you purchased recently for 10 million. You paid 20% as down payment and rest 80% is through mortgage loan. There are 100 apartments in the building. There are certain % of appt. which are open. What are the important things you need to know to make decision that this investment is worth and how much rent should be?
2. If we assume 80% of the apartments are occupied. There is fixed cost of 400,000 per year and variable cost is 10% of rent. Mortgage payment is $50,000 per month. What should be the rent if we want to have 10% return on investment
3. Based on City requirement the max rent allowed is $1200. In that case what would you do?  
4. Based on City requirement the max rent allowed is $1200. In that case what would you do?  
5. If you have two option which one you would choose if both have same return on investment? Keeping $1200 rent with lower occupancy rate or decreasing the rent but have higher occupancy rate