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A real estate office handles a 40-unit apartment complex. When the rent is $540 per month, all units are occupied. For each $40 increase in rent, however, an average of one unit becomes vacant. Each occupied unit requires an average of $65 per month for services and repairs. What rent should be charged to obtain a maximum profit.
A real estate office handles a 40-unit apartment complex. When the rent is $540 per month, all units are occupied. For each $40 increase in rent, however, an average of one unit becomes vacant. Each occupied unit requires an average of $65 per month for services and repairs. What rent should be charged to obtain a maximum profit?
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- Given the following scenario- Office building, 3 stories, 3000 square feet (SF) gross interior floor space each, 2 tenants per floor, 1 350 sf of the building is used for hallways, common bathrooms, stairs, elevator, and lobby. The owner wants a gross rent of $135,000 per year. (First, establish the Load Factor) What is the rent that the Owner should charge per square foot? If Tenant Z rents 1200 sf of usable area, what will be his monthly rent? If the building has an operating expense ratio of 28% of gross rents, including vacancy and reserves, what is the Net Operating Income? The sale price at a 9% CAP rate?Jason Bartlett is the managing partner of a business that has just finished building a 60-room motel. Bartlett anticipates that he will rent these rooms for 15,000 nights next year (or 15,000 room-nights). All rooms are similar and will rent for the same price. Bartlett estimates the following operating costs for next year: Variable operating costs $ 5 per room-night Fixed costs Salaries and wages $171,000 Maintenance of building and pool 42,000 Other operating and administration costs 162,000 Total fixed costs $375,000 The capital invested in the motel is $900,000. The partnership's target return on investment is 25%. Bartlett expects demand for rooms to be uniform throughout the year. He plans to price the rooms at full cost plus a markup on full cost to earn the target return on investment. 1. What price should Bartlett charge for a room-night? What is the markup as a percentage of the full cost of a room-night? 2.…A University of Massachusetts study found that married women who work outside the home do about one hour less of housework per week for every $7500 they earn outside the home. Assume that they hire a housekeeper one time per week for $120; that the $7500 is received in uniform amounts of $625 per month; and, that the housekeeper is paid weekly with these payments made before the $625 is received. What rate of return are they making per week on their “investment” in the housekeeper?
- ABC Residential Investors, LLP, is considering the purchase of a 120-unit apartment complex in Steel City, Pennsylvania. A market study of the area reveals that an average rental of $614 per month per unit could be realized in the appropriate market area. During the last six months, two very comparable apartment complexes have been sold in the same market area. The Oaks, a 140-unit project, sold for $9 million. Its rental schedule indicates that the average rent per unit is $578 per month. Palms, a 90-unit complex, is presently renting units at $678 per month, and its selling price was $6.6 million. The mix of number of bedrooms and sizes of units for both complexes is very similar to that of the subject property, and both appear to have normal vacancy rates of about 10 percent annually. All rents are net as tenants pay all utilities and expenses. Based on the data provided here, how would an appraiser establish an estimate of value? (Round intermediate calculations and final answers…The hotel has 85 rooms, an average daily rate of $88, and a per occupied room cost of $12. Its fixed costs are $102,000 per month. What is the required occupancy percent to realize a monthly profit of $15,000?The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $60 a night. Operating costs are as follows. Salaries $10,850 per month Utilities 2,900 per month Depreciation 1,600 per month Maintenance 850 per month Maid service 8 per room Other costs 34 per room Determine the inn’s break-even point in (1) number of rented rooms per month and (2) dollars. 1. Break-even point in rooms 2. Break-even point $ If the inn plans on renting an average of 50 rooms per day (assuming a 30-day month), what is (1) the monthly margin of safety in dollars and (2) the margin of safety ratio? (Round ratio to 0 decimal places, e.g. 10.) 1. Margin of safety $ 2. Margin of safety ratio %