Real Estate Math
A Maine single-family home rents for $1,650/month. The owner wants a 7% annual return on their $275,000 investment. Are they achieving their target?
AYes, they are achieving approximately 7.2%✓ Correct
BNo, they are only achieving approximately 6.5%
CYes, they are achieving exactly 7%
DNo, they need to raise rent to $1,754/month to achieve 7%
Explanation
Annual rent = $1,650 × 12 = $19,800. Return = $19,800 ÷ $275,000 = 0.
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