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.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:9. Choosing a real estate investment
Aa Aa
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.
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