Chapter 28

Question 1

Inflation risk is …

Answer 1

The risk that income from the investments may not increase as fast as inflation.

Question 2

Which of these is an advantage of investing in a single family home ?

Answer 2

The market for a single-family investment gone will not be inundated with competitive rentals.

Question 3

The market for which type of property will not be inundated with competitive rentals?

Answer 3

Single family homes

Question 4

What is the main reason two to four unit properties are popular as an investment ?

Answer 4

The investors can live in one unit while renting out the remaining units.

Question 5

Which type of buildings are usually one or two stories that can accommodate warehouse and light industrial activity in addition to offices ?

Answer 5

Flex space office buildings

Question 6

Real estate is typically

Answer 6

Illiquid

Real estate is considered an illiquid asset because it cannot be transferred as easily or quickly as other assets such as stock or bonds

Question 7

A strip center is also called a

Answer 7

Convenience center

Question 8

Liquidity risk exists when/if

Answer 8

The real estate market is slow with few buyers or sellers.

Question 9

The ____ is based in the idea that money is available at the present time is worth more then the same amount in the future , due to its potential earning capacity.

Answer 9

Time value of money

Question 10

Shopping centers that provide general merchandise , clothing , home finishing , and serves , that are anchored by one or two department stores , and have a total leasable space or about 500,000 square feet are called what ?

Answer 10

Regional centered

Question 11

What is the primary advantage/s of owning a condominium as an investment property ?

Answer 11

Condos are easy to rent and the condos association provides exterior and ground maintenance .

Question 12

Which of the following is not a type of industrial property?

A) corporate headquarters
B) flex
C) manufacturing
D) warehouse / distribution

Answer 12

A) Corporate headquarters

Flex , manufacturing , and warehouse building are industrial buildings .

Question 13

Mega malls contain ….

Answer 13

3 or more full-like department stores

Question 14

What are the primary disadvantages of investing in a condominium ?

Answer 14

Lower appreciation rates and lack of control over costs.

Question 15

How can an investor obtain a substantial tax even fit when investing in a fixer upper ?

Answer 15

Live in the home for 2 year .

Question 16

Which of the following is NOT a disadvantage of investing in a single - family home?

A) Economy of operations
B) Repairs
C) Vacancy
D) Scarcity

Answer 16

D) Scarcity

Scarcity is an advantage …. fewer homes available for rent , the better the likelihood of having a tenant.

Question 17

Which of the following is an advantage of investing in a two-to-four unit dwelling ?

Answer 17

Tenants often pay for their own utilities and repairs .

Question 18

With a two to four family dwelling as an investment , which of the following expenses would the owner probably not pay for ?

Answer 18

Tenants usually pay for GAS when they rent an apartment. This cost is not typically paid by the owner / investor.

Question 19

Flex space office building usually contain ?

Answer 19

Office space plus light industrial space

Question 20

What are the primary disadvantages of investment in a condominium?

Answer 20

Lower appreciation rates and lack of control over costs

Question 21

Which occurrence is a advantage to investing in undeveloped land ?

Answer 21

Appreciations potential