I'm trying to work out some Financial Management Rate of Return (FMRR) calculations for practice and I was curious if there are some industry standard variables to use.
Here are some assumptions I'm making at the moment. I know each situation is different but this is just for practice.
- Inflation at 3%
- Closing costs at 1.5%
- Reinvestment rate of 7.5%
- Loan-to-value ratio of 80%
- Yearly appreciation of 3%
- Yearly cost increases of 3%
- Yearly rental increases of 3%
- Tax rate of 28% (should I include state?)