Texas Principles of Real Estate 2: Chapter 6 Quiz

Straight line depreciation

A method of depreciation under which improvements are depreciated at a constant rate throughout the estimated useful life of the improvement is known as...?

All of the above

Investing in real property includes which of the following...? -Cash flow -Appreciation -Tax savings -All of the above

Capital gains

The profit realized from the sale of real estate or other investments is known as...?

Section 1031 Exchange

This is a section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes...?

27.5

Using the straight line depreciation method, residential property can be depreciated over how many years...?

Appreciation

An increase in value is known as...?

Higher

By using a high amount of leverage to purchase a property, the investor will experience a ........... degree of risk?

Depreciation

The amount of decrease in value of an asset that is allowed in computing the value of the property for tax purposes is known as...?

Leverage

The use of a mortgage when buying an investment property is an example of...?

Leverage

The use of debt financing of an investment to maximize the return per dollar of equity invested is known as...?