DOP DOWN OPTIONS FROM TOP TO BOTTOM:

1.) commericial / residentual

2.) an open-ended / a closed-end

9. Choosing a real estate investment Comparing Real Estate Investments Suppose Becky 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 $45,000 and that the other (property B) has an NOI of $38,000. If the cap rate is 10%, 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 Becky to consider other factors. If she is a first-time investor, she is probably better off investing in property. (Note: Round your answers to two decimal places.) Alternatively, Becky 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 can increase the diversification of individuals who are already invested in the stock market. O All REITs own income-producing real estate such as office buildings and hotels. 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. 9. Choosing a real estate investment Comparing Real Estate Investments Suppose Becky 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 $45,000 and that the other (property B) has an NOI of $38,000. If the cap rate is 10%, 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 Becky to consider other factors. If she is a first-time investor, she is probably better off investing in property. (Note: Round your answers to two decimal places.) Alternatively, Becky 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 can increase the diversification of individuals who are already invested in the stock market. O All REITs own income-producing real estate such as office buildings and hotels. 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