1.

A building costing Rs.700000.00 has been constructed on a freehold land measuring 100 sq m recently in a big city. Prevailing rate of land in the neighbourhood is Rs.150.00 per sq m. Determine the net rent of the property, if the expenditure on an outgoing including sinking fund is Rs.24000.00 per annum. Work out also the gross rent of the property per month.(a) 48000/-, 8000/-(b) 18000/-, 6000/-(c) 46700/-, 6000/-(d) 48000/-, 6000/-The question was posed to me in an international level competition.Question is taken from Values, Tax, Funds & Rents etc in portion Valuation, Reports Technical and Design Data of Civil Engineering Drawing

Answer»

Right answer is (d) 48000/-, 6000/-

To EXPLAIN: Cost of construction= Rs.700000.00

Cost of land @Rs.150.00 per sq m = 100*150 = Rs.150000.00

Net return:

On building @ 6% on the cost of construction = 700000.00 *6/100 = Rs.42000.00

On the land @ 4% on the cost of land = 700000.00 *6/100 =Rs.6000.00

Total net rent per YEAR =Rs.48000.00

Gross rent = Net rent + outgoings = 48000+24000.00 = 72000.00 per annum

Gross rent per month = 72000/12 = 6000.00.



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