Dhanang wants to buy an apartment listed at Rp 780,000,000 in Jaksel for investment purposes. He estimates that he would be able to rent it out at a monthly rate of Rp 8,000,000 with 85% occupancy. He plans to sell the property after renting it out for 5 years, and estimates the property to appreciate in value by 6% each year. He also assumes no transaction costs.
Assuming a discount rate of 12%, and that all of Dhanang’s assumptions are true: