A long-term resident moves out of apartment number 35 on the last day of May because they are unhappy with the neighbor and later a new resident takes possession on June 16th. Begin to wonder what the total economic cost of the vacancy was. The rent on the apartment is $650 painting labor costs. You 250, and you had to purchase 3.5 gallons of pain at $12 per gallon. The cleaner cost $85. And the carpet cleaner charged you $75. You ran an ad in the Oregon for 350 to get the apartment rented. In order to convince the resident to sign a lease, you had to give them half a month free lease concession, assume a thirty day

Answer 1

To calculate the total economic cost of the vacancy for apartment number 35, let's break down all the costs incurred during the vacancy period and any lost rental income.

Cost Breakdown

1. Lost Rent:

   • The apartment was vacant from June 1 to June 16, which means it was unoccupied for 15 days.
   • Daily Rent Calculation:
     • Monthly Rent = $650
     • Daily Rent = $650 / 30 = $21.67
   • Total Lost Rent for 15 Days:
     • Lost Rent = Daily Rent x Number of Days
     • Lost Rent = $21.67 x 15 = $325.05

2. Painting Costs:

   • Labor Costs: $250
   • Paint Costs: 3.5 gallons at $12/gallon = 3.5 x $12 = $42
   • Total Painting Costs = Labor + Paint = $250 + $42 = $292

3. Cleaning Costs:

   • Cleaner Cost: $85
   • Carpet Cleaner Cost: $75
   • Total Cleaning Costs = $85 + $75 = $160

4. Advertising Costs:

   • Ad Cost: $350

5. Lease Concession:

   • Half a Month Free Lease Concession = $650 / 2 = $325

Total Costs

Now, let's sum all the costs incurred during the vacancy period:

• Lost Rent: $325.05
• Painting Costs: $292
• Cleaning Costs: $160
• Advertising Costs: $350
• Lease Concession: $325

Total Economic Cost Calculation

Total Economic Cost = Lost Rent + Painting Costs + Cleaning Costs + Advertising Costs + Lease Concession

= $325.05 + $292 + $160 + $350 + $325

= $1452.05

Thus, the total economic cost of the vacancy for apartment number 35 is $1452.05.