Comparing Real Estate Investments Suppose Vicky wants to invest in real estate and is considering two different residential properties. Based on the expected incomes and operating expenses of each, she estimates that the first property (property A) has an NOI of $43,000 and that the other (property B) has an NOI of $32,000. If the cap rate is 9%, property A has an estimated value of and property B has an estimated value of . In deciding between these two properties, it is important for Vicky to consider other factors. For instance, in general, only seasoned investors should invest in property. Alternatively, Vicky might want to consider investing in a real estate investment trust (REIT), a type of investment company that operates similarly to mutual fund. Which of the following statements regarding REITS are true? Check all that apply. They pay dividends. They can increase the diversification of individuals who are already invested in the stock market. Income distributed from REIT investments is taxed at 15%. The value of REITS tends to move in the same direction as the general stock market.

Comparing Real Estate Investments Suppose Vicky wants to invest in real estate and is considering two different residential properties. Based on the expected incomes and operating expenses of each, she estimates that the first property (property A) has an NOI of $43,000 and that the other (property B) has an NOI of $32,000. If the cap rate is 9%, property A has an estimated value of and property B has an estimated value of . In deciding between these two properties, it is important for Vicky to consider other factors. For instance, in general, only seasoned investors should invest in property. Alternatively, Vicky might want to consider investing in a real estate investment trust (REIT), a type of investment company that operates similarly to mutual fund. Which of the following statements regarding REITS are true? Check all that apply. They pay dividends. They can increase the diversification of individuals who are already invested in the stock market. Income distributed from REIT investments is taxed at 15%. The value of REITS tends to move in the same direction as the general stock market.

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 9FPE

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