Real Estate Investments Answers

Describe the concept of “house flipping.”

Helen bought a four-unit apartment building for $561,000. The property lost value at a rate of 4.1% per year. Helen rented out each unit for $530 per month, and paid $11,200 per year in upkeep costs. After eight years, she sold the building. To the nearest hundred dollars, what was Helen’s total profit or loss, assuming that she rented out each of her units continually?a.$70,100 lossb.$45,700 lossc.$326,600 profitd.$43,900 profit

Rosalyn is planning to sell her apartment complex. Ten years ago, she bought the eight-room complex for $420,000. The building has gained 2.2% in value every year since she bought it. She charges a monthly rent of $720 for each room, and pays $22,900 per year in upkeep costs. If Rosalyn has kept all of the rooms occupied continuously since she bought it, to the nearest hundred dollars, how much profit will she have made in total when she sells it?a.$770,400b.$554,600c.$564,300d.$492,300

Roger’s home originally cost him $165,000. For the first six years he lived there, his house grew in value at a rate of 1.6% per year. After that, his property value increased by 3.9% per year for the next eight years. To the nearest hundred dollars, how much had Roger’s home increased in value after fourteen years?a.$76,200b.$75,600c.$81,500d.$56,400

Marcy charges $575 per month to rent a room at her eight-room apartment complex. Running the complex costs Marcy $9,880 per year in upkeep. Assuming that all of the rooms are rented out, how much does Marcy make from her apartment complex every year?a.$55,200b.$45,320c.$65,080d.$16,780

Say that you purchase an apartment complex for $655,000. The property value increases by 2.6% every year. The complex has five units, which you rent out for $490 per month. Upkeep on the building costs you $13,800 per year. Assuming that you are able to keep all of the units rented out constantly, after eight years, will you have gained more money from appreciation of the property or from renting out the apartments, and how much more money will you have gained from that source than from the other, to the nearest hundred dollars?a.You will gain $19,500 more from the rent than from the appreciation.b.You will gain $16,900 more from the rent than from the appreciation.c.You will gain $24,500 more from the appreciation than from the rent.d.You will gain $10,700 more from the appreciation than from the rent.

Tammy’s home cost her $184,000. She lives in an area with a lively real estate market, and her home increases in value by 3.5% every year. If Tammy sells her home after thirteen years, how much profit will she have made, to the nearest hundred dollars?a.$8,500b.$87,800c.$83,700d.$103,800

Lily is planning to sell her home, which she bought seven years ago for a total of $168,000.The property value has increased by 2.5% each year for the past seven years. In the meantime, Lily has made improvements and renovations to the home which increase its sale value by $52,000. How much will Lily sell the home for, to the nearest hundred dollars?a.$261,500b.$249,400c.$267,000d.$251,700

Randolph owns an apartment complex with six units. He charges $480 per month to rent one unit. Upkeep on the building costs Randolph $7,370 per year. If half of the rooms are filled continuously, how much will Randolph earn from his apartment complex over four years?a.$39,640b.$108,760c.$69,120d.$38,200