Ch 15

Question 1

When considering purchase of a single-unit investment property it is important to research the market area including such factors as:

Answer 1

Rent levels
Vacancy rates
Do the tenants pay most or all the utilities?
Any proposed land use changes?
Any proposed zoning changes?
Number of other homes purchased for investment
Are these rental purchases interim uses?
Do they signal a transition of use in the market area?
Are the rentals on a month to month basis?
Are long-term leases (more than 1 year) common?
Availability of financing
Will lenders charge higher interest and provide less desirable terms for investment property purchasers?

Question 2

Range is defined as:

Answer 2

“The region or area over which something is found, is distributed, or occurs.”

The range is the number that represents the actual difference. We can say that the numbers range from 102.0 to 110.4. But the actual range is 8.4.

Question 3

An arithmetic mean is defined as:

Answer 3

“A measure of central tendency. The sum of values for a variable in a sample or population divided by the number of items in the sample or population. The arithmetic average.”

Question 4

A median is defined as:

Answer 4

“A measure of central tendency identified as the middle value in an ordered array of numerical values, e.g., 7 is the median of (1, 4, 6, 6, 7, 9, 11, 22, 41). If the ordered array contains an even number of values, then the median is the mean of the two values on either side of the middle.”

The median is the number in the middle.

Question 5

The mode is defined as:

Answer 5

“A measure of central tendency consisting of the numerical value or categorical characteristic that occurs most frequently in a sample or population. For example, the mode of the data set (2, 4, 5, 6, 6, 7, 7, 8, 8, 8, 8, 10, 12) is 8, and the mode of (poor, poor, below average, average, average, average, average, good, good, excellent) is average.”