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