Real Estate Math
A Kansas landlord is calculating the break-even occupancy for a rental. Monthly expenses (including mortgage) total $8,500. If each unit rents for $850/month, how many units are needed to break even?
A8 units
B9 units
C10 units✓ Correct
D11 units
Explanation
Units needed = $8,500 ÷ $850 = 10 units. Using the values given ($8,500, $850), apply the appropriate formula..
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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