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LEASES 3.4. GENERAL LEASE  A lease is a contract that allows for one party to use the property of another party, for an extended period of time.  The.

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Presentation on theme: "LEASES 3.4. GENERAL LEASE  A lease is a contract that allows for one party to use the property of another party, for an extended period of time.  The."— Presentation transcript:

1 LEASES 3.4

2 GENERAL LEASE  A lease is a contract that allows for one party to use the property of another party, for an extended period of time.  The lessee is the party or individual wanting to utilize the property.  The lessor is owner of the property.  Rental agreement  Contracts

3 RENTAL AGREEMENTS  Common rental agreements : landlord and tenant.  In a fixed-term tenancy, either the landlord or the tenant may terminate a rental agreement when the specified term is nearing completion.  An at-will tenancy is a tenancy in which either the landlord or the tenant may terminate at any time by giving reasonable notice.  The security deposit is initial payment paid by the tenant and held by the landlord until the property is returned or vacated.

4  Jabba The Hutt is asking for a 2000 republic credit for a security deposit and 950 republic credit per month rent. What will be the total cost for a 18 month lease?  *950=19,100 RC

5 RENTABLE OFFICE SPACES  Class A office spaces are found in the best quality buildings and the most desirable locations.  Class B office spaces are found in buildings are well-maintained, but also a little older. Just older building of Class A.  Class C: older buildings in need of extensive repairs and are found in less desirable areas.

6  A company owns a Class B building and charges $3500/month to rent it. If the company spends $90,000 to upgrade the facility, by how much would they have to increase the monthly rent to recover the cost of the upgrade within 5 years?  5 years = 60 months.  90000/60= $1500/month  The rent in the upgraded facility would need to be $5000/month.

7  Luke has moved to New York and wish to rent his home in Tatooine, so he hires a management company that charges 7%of the rental price for their fee. If the home rents for $1500/month, how much will Luke earn from the monthly rent.  The company charges 7% of $1500, which is $105. The rest, $1395, is sent to Luke.

8 LEASING A CAR  The up-front payment.  The monthly payment  The length of the lease  Possible additional charges at the end of the lease.

9  James wants to lease a new Aston Martin car, and he is presented with the following three options. Compute the total cost of each option.  Option 1: $0 up-front, with a payment of $ 209/month for 36 months.  Option 2: $999 up-front, with a payment of $189/month for 36 Months.  Option 3: $2999 up-front, with payment of $149/ month for 36 Months.

10  Option 1: 0+209*36=$7524  Option 2: *36=$7803  Option 3: *36=$8363

11  For the new Prius, Arthur is considering leasing can be purchased for a down payment of $4000 and 36 monthly payments of $550. After 3 years, he will own the car and, based on projections, he will be able to sell it for $16,000. If he follows this plan, what will be total net cost for the car?  The total net cost will be the amount paid less than the amount recovered.  The amount paid will be *36=$23,800  Thus, =$7800

12 HW 3.4 P. 195  1-17


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