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If the net income after all operating expenses but before capital recapture from a small apartment house is estimated to be $48,000. How much would an investor be willing to pay for the porperty if first mortgages are available for 75% the purchase price at 6.5% interest and owner's equity requires a 15% return. The remaining life of the buildings is over 50 years.

Use the income approch to estimate the value of this property.

A. What is the capilitaztion rate adjusted for recapture? .....................

B. What is the estimated value of this property using the income capitalization approach?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92099988

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