Updated over 6 years ago on .
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Life Estate: doable or to many issues
I am looking at using a life estate, but am getting push back from my broker, and they are questioning how to price it.
Would a property being sole this way be priced by backing out the rental value of for the time until I dean from the FMV?
For this example assume FMV=500K, annual rental value 42K, 5% annual increase in rent, and I am going to live 10 yrs.
So I would sell for 750, but net 221,728.51, and have the right to life there for 10 yrs.
| $ 42,000.00 | ||
| $ 44,100.00 | (42K*1.05) | |
| $ 46,305.00 | ||
| $ 48,620.25 | ||
| $ 51,051.26 | ||
| $ 53,603.83 | ||
| $ 56,284.02 | ||
| $ 59,098.22 | ||
| $ 62,053.13 | ||
| $ 65,155.79 | ||
| $ 528,271.49 | Rental value | |
| 750000-rent value | ||
| SALE PRICE= | $ 221,728.51 |
So would I walk w/ 221K and a place to live the rest of my life?