Real Estate Investment

Question 1

The ability to sell a property without losing initial investment

Answer 1

Appreciation

Question 2

Investor using borrowed funds to purchase an investment property is called?

Answer 2

Leverage

Question 3

A correct example of positive leverage

Answer 3

High yield on borrowed money

Question 4

Which characteristic is a disadvantage of real estate investment?

Answer 4

Management considerations

Question 5

Which item is added to rental income to calculate effective gross income?

Answer 5

Other income

Question 6

The method of estimating value as a multiple of monthly gross rental income is?

Answer 6

Gross rent multiplier

Question 7

The type of appraisal approach that uses income capitalization to estimate value

Answer 7

Income approach

Question 8

As net operating income increase, present value:

Answer 8

Increases

Question 9

Which type of income is used to compute a gross rent multiplier?

Answer 9

Gross monthly income

Question 10

I’m estimating operating expenses for a commercial investment, the broker would include:

Answer 10

Management fees