REE Ch. 28 Q's
The government is most likely to pass rent control laws on which kind of property? - Shopping center - Industrial park - Office building - Apartment building
Apartment building
Changes in economic conditions creates which type of risk? - Environmental risk - Business risk - Management risk - Legislative risk
Business risk
What is the primary advantage/s of owning a condominium as an investment property? - Condos are easy to rent and the condo's association provides exterior and grounds maintenance - Condominiums appreciate faster than other investment properties - They are the most liquid of all investment properties - They are usually in popular vacation destinations
Condos are easy to rent and the condo's association provides exterior and grounds maintenance
A strip center is also called a - Shopping center - Convenience center - Neighborhood center - Mall
Convenience center
Which of the following is not a type of industrial property? - Corporate headquarters - Flex - Manufacturing - Warehouse / distribution
Corporate headquarters
The market for which type of property will not be inundated with competitive rentals? - Single-family homes - Condominiums - Apartments - 3-4 family dwellings
Single-family homes
The ____________ is based on the idea that money available at the present time is worth more than the same amount in the future, due to its potential earning capacity. - money principle - time value of money - value of time - rate of return
time value of money
Financial leverage can be measured as - A debt to equity ratio - Shareholders' equity divided by total liabilities - Total liability divided by total equity - A debt to income ratio
A debt to equity ratio
Which of the following is NOT an advantage of investing in commercial properties? - Most commercial leases contain either a cost-of-living increase or a percentage lease - There is very little risk of any kind of rent control with commercial properties - During times when many buildings are being built, the market can become flooded with unused commercial space - That if a property has a long-term lease with a strong tenant, the likelihood of a steady income is strong
During times when many buildings are being built, the market can become flooded with unused commercial space
What type of office buildings are usually one or two stories that can accommodate warehouse and light industrial activities in addition to offices? - Flex space office buildings - Garden office buildings - High rise office buildings - Research and development office buildings
Flex space office buildings
Changes in tax laws or rent control is which kind of risk? - Inflation risk - Business risk - Management risk - Legislative risk
Legislative risk
Which of the following is NOT a characteristic of liquidity? - Rapid conversion - Minimal loss of value - Lull in the regularly-traded market - Ready and willing buyers at all times
Lull in the regularly-traded market
Shopping centers that provide general merchandise, clothing, home furnishings, and other services, that are anchored by one or two department stores, and have a total leasable space of about 500,000 square feet are called what? - Malls - Mega malls - Neighborhood centers - Regional centers
Regional centers
What covenant might a condominium have that would interfere with an investor's plans for the condo? - Limited parking - Requirement to maintain limited common areas - Requirement to live in the condo for 1 year before leasing it - No pet rule
Requirement to live in the condo for 1 year before leasing it
Which of the following is an advantage of investing in a two-to-four unit dwelling? - They are becoming more expensive to purchase - They are becoming more scarce - Tenants often pays for their own utilities and repairs - There are few properties of this size
Tenants often pays for their own utilities and repairs
Why are condominiums good investment properties? - They are inexpensive to buy and easy to sell - They are easy to rent and the investor is not responsible for exterior maintenance - They have rules for renters to follow - They usually have a property manager to monitor rentals
They are easy to rent and the investor is not responsible for exterior maintenance
Because money has potential earning capacity, it is said that money available at the present time is worth more than the same amount available in the future. This concept is known as - Time value of money - A bird in the hand - Recession risk - Earning value of money
Time value of money
Which type of property is the riskiest investment? - Unimproved land - Residential properties - Retail centers - Mixed-use buildings
Unimproved land