You own a construction and real estate company. You are building a new office building. The cost of the building is going to be $6,000,000. Your down payment is $250,000. Your bank gave you an interest rate of 4%, compounded monthly. There will be 40 units in the building, of which four will have a conference room making them 25% larger than the other units will. The monthly payment for a 30 year mortage with given values is $27,451.38. The larger units rent must be proportional to their size.
1. After five years, you find out you need to retrofit the building to meet new energy standards. The retrofit will cost $750,000, determine the new rent (office & office with conference room) you will charge in order to cover the retrofit and breakeven assuming no units were sold. 2. What is the sale price per unit under Question’s 1 conditions if you want a 25% profit?