Drop-down 1 Options: commercial or residential

Drop-down 2 Options: a closed-end or an open-end

9. Choosing a real estate investment Comparing Real Estate Investments Suppose Felix wants to invest in real estate and is considering two different residential properties. Based on the expected incomes and operating expenses of each, he estimates that the first property (property A) has an NOI of $42,000 and that the other (property B) has an NOI of $35,000. 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 Felix to consider other factors. For instance, in general, only seasoned investors should invest in property. (Note: Round your answers to two decimal places.) Alternatively, Felix 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 allow individuals to buy shares in a real estate-based stock portfolio. U 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. They can increase the diversification of individuals who are already invested in the stock market. 9. Choosing a real estate investment Comparing Real Estate Investments Suppose Felix wants to invest in real estate and is considering two different residential properties. Based on the expected incomes and operating expenses of each, he estimates that the first property (property A) has an NOI of $42,000 and that the other (property B) has an NOI of $35,000. 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 Felix to consider other factors. For instance, in general, only seasoned investors should invest in property. (Note: Round your answers to two decimal places.) Alternatively, Felix 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 allow individuals to buy shares in a real estate-based stock portfolio. U 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. They can increase the diversification of individuals who are already invested in the stock market