Dick owns a house that he rents to college students. Dickreceives $750 per month
ID: 2433512 • Letter: D
Question
Dick owns a house that he rents to college students. Dickreceives $750 per month rent and incurs the following expensesduring the year. Real estate taxes $1,250 Mortgage, interest$1,500, Insurance $375, Repairs $562. Dick purchased the house in1980 for $48,000, excluding land costs, and depreciates it on astraight-line basis with no salvage value and a useful life of 30years. Calculate dick’s net rental income for the year,assuming the house was rented for a full 12 months.Rental Income $ Expenses Net rental income $ Dick owns a house that he rents to college students. Dickreceives $750 per month rent and incurs the following expensesduring the year. Real estate taxes $1,250 Mortgage, interest$1,500, Insurance $375, Repairs $562. Dick purchased the house in1980 for $48,000, excluding land costs, and depreciates it on astraight-line basis with no salvage value and a useful life of 30years. Calculate dick’s net rental income for the year,assuming the house was rented for a full 12 months.
Rental Income $ Expenses Net rental income $
Explanation / Answer
Yearly RentalIncome $750x12 $9,000 Yearly Expenses ============ Real estate'staxes $1,250 MortgageInterest $1,500 Insurance $375 Repairs $562 Buildingdepreciation $1,600 _________ TotalExpenses $5,287 ======== $5,287 ________ NetRentalIncome $3,713 ========
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