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An investment property is purchased for $17,580,000 with 60% equity and an inter...
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An investment property is purchased for $17,580,000 with 60% equity and an interest-only loan to finance the balance. The average appreciation rate of the property is 6% per annum. All operating costs and finance costs are exactly equal to rent income. If the property is sold after 10 years and selling costs are 3% of the sale price (based on market valuation determined from the annual rate of appreciation), what is the total annual ROE (return on equity) of the investment? Ignore any tax.
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