Instructions: You are underwriting a building where the...

Instructions: You are underwriting a building where the average unrenovated effective rent is $1,875. Rent growth is growing at a constant 4% per year and the rent premium is $165. Calculate the unrenovated and renovated effective rent for Year 1-5. All boxes should be filled. Rent Growth 4% Rent Premium $165 Unrenovated Effective Rent Year 1 $1,875 Year 2 Year 3 Year 4 Year 5 Renovated Effective Rent

Labs

Want to see this concept in action?

NEW

Explore this concept interactively to see how it behaves as you change inputs.

View Labs

Transcript

00:01 Okay, so in problem number five, we have a function y equals 1 .3485x plus 840 .51, where x is square footage.

00:16 So we want the monthly rent with 1 ,200 square feet.

00:20 So first we want to let x equal 1 ,200.

00:26 So just put in 1 ,200 for x and we'll get our value for y.

00:33 Grab a calculator, 1 .3485 times 1 ,200, and then add 840 .51.

00:46 That will be $2 ,458 .71.

00:55 Now, the second part, we want to know the square footage, so now we want to let y equal 1900 and we're going to solve for x so subtract 840 .51 from both sides 1900 minus 840 .51 that gives me 105949 and then divide both sides by 1 .3485 and that is going to give you 785 .685 and that is going to give you 785 .685.

01:48 84, so about 786 square feet.

01:58 Now let's look at number six.

02:02 Conan is moving into an apartment.

02:04 His rent is 2000.

02:06 We want to know how much he's going to pay up front.

02:09 Okay, so his application fee is 3 % of 2000.

02:15 So 0 .03 times 2000.

02:24 That is going to be $60 .00.

02:28 Then he has a credit fee, so that's $20.

02:34 His security is one month's rent and the last month's rent.

02:39 So that's going to be two times $2 ,000.

02:45 So that's $4 ,000.

02:49 And then he has a broker's fee that's 14 % of a year's rent.

02:54 So we want 0 .14 times 12 times 2 ,000...

Question

Please give Ace some feedback