THE SCENARIO
Let's say I
bought a house in an installment sale over the course of a decade, and I want to make 9% on my money.
In order for that to happen, the house would have to be worth $145,135 at the end of the decade, but appreciation fell short of my expectations (only averaging 3%), and the house is worth $121,442 instead.
However, now I have a rental house that's free and clear (i.e. there's no mortgage on it). I can net* $1150 per month in rent from the house, and I plan to sell it after 5 more years of appreciation.
The Question: What would the house need to be worth after 5 years, in order for my
total investment return to be 9%? Assume that rent stays the same throughout the 5 years.
* Remember t...
Read more...
