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The Petersik family is considering purchasing a second home to use for short term rentals near...

The Petersik family is considering purchasing a second home to use for short term rentals near the beach. If it purchases the house, they will place a down payment of $59,000 on the house. They estimate they will get an annual net rental profit of $10,000 after their mortgage and expenses are paid. After 20 years, they plan to pass the rental home along to their children, so assume the home has negligible salvage value. What would be the ERR if the Petersik family decides to invest in a rental home, assuming they keep the home for 20 years? Assume their MARR is 12%.

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jeff jeffy answered 2 years ago
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