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The NPV, having said that, will not take under consideration the depreciation because it is the price of funds. Nonetheless, this is a component on the extended-phrase administration price, which also incorporates the upkeep rate and also the depreciation component.

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In many cases, the brief-term management fee is connected with an extra share of appreciation, often called the IRR. The IRR is just the difference between the very long-time period administration charge and also the prolonged-term rent.

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