A property has following
details
Area of Land 3.50 m2
Plinth Area of Building 110 m2
Rate of construction Rs. 1400/ m2
Net income expected is 10% on
land and 12 x 1/2 % on building.
Sinking fund instalment is Rs.
800 per annum.
Repair Rs. 1000 per month.
Other out going 20% gross
income.
Calculate the monthly rent of
to be charged.
Ans.
Rent Fixation
Cost of land
= 350 x 100
= Rs. 35,000/-
Therefor
Net income expected on the land
= 35,000 x (10/100)
= Rs. 3500 /-
Cost of building
= 110 x 1400
= Rs. 154,000 /-
Therefor
Net income expected on the
building
= 154,000 x (12x1/2) / 100
= Rs. 19250 /-
Therefor
Net rent per annum
= Rs. 19250 /-
= Rs. 22750 /-
Let this equal in R
Outgoing
Sinking fund installment – Rs.
800 /-
Repairs per month Rs. 1000 /-
Other outgoing 20% of the gross
rent = 0.20 R
Therefor
Total outstanding = 0.20 R +
1800
Therefor
Net income = R – (0.20R + 1800)
= 0.8 R – 1800
Therefor
0.80 R – 1800
= 22,750
Therefor
R = 30687.5 /-
Therefore
R = Rs. 30687.5 /-
Therefore
Monthly rent
= 30687.5 / 12
= 2557.29
Therefore
Monthly rent to be charged =
Rs. 2551.29
