A multi-unit rental property was bought four years ago for $1,200,000 with a $200,000 down payment. The property now rents for $8,500 per month. Expenses and debt service are $1,000/month and $6,500/month respectively. An appraiser estimates the property's current value at $1,450,000. The investor pays off her principal balance at a rate of $5,000 per year. Compute the following investment returns for the Investor:
A multi-unit rental property was bought four years ago for $1,200,000 with a $200,000 down payment. The property now rents for $8,500 per month. Expenses and debt service are $1,000/month and $6,500/month respectively. An appraiser estimates the property's current value at $1,450,000. The investor pays off her principal balance at a rate of $5,000 per year. Compute the following investment returns for the Investor:
ROE (Return of Equity) = ?
我学的公式是：ROE = Cash Flow ÷ Equity
我的算法:
Step1: Cash Flow = rent $8,500×12/m – expenses $1,000×12/m – debt service $6,500×12/m = 120,000
Step 2. Equity = Current value – current loan amount
Equity = 1, 450,000 (现价) - 【(1,200,000 – 200,000 买入时的贷款) -已还的贷款（5，000×12/m）×4/yr】
= 1，450，000 – （1，000，000 – 240，0000） = 1，450，000 - 760,000 = 690,000
Step 3: ROE = Cash Flow ÷ Equity
ROE = 120,000 ÷ 690,000 = 0.1739 = 17.39% , 答案是2.55%， 我错在了哪里呢？！
键时概念要清楚，特别是一些容易忽略的细节。
的题目不会完全一样，但是概念都在考古题的范围之内。