1. The potential risks in a real estate investment include: (A) Liquidity risk,

Question

1. The potential risks in a real estate investment include:

(A) Liquidity risk, capital markets risk, legislative risk

(B) Business risk, financial risk, management risk

(C) Interest rate risk, environment risk, market risk

(D) All of the above

2.

If a particular desirable site is a 100’ by 80’ rectangular shape, and if the local zoning codes require that the building’s footprint be setback ten feet from each side of the property line, and if the FAR for that site is 4.0 per square foot of the building’s footprint. What is he maximum building square footage that can be built?

A 72,000     

b 51,200    

c 18,000

d. 15,300

Explanation / Answer

All of the above, because real estate is a sector which bears almost the majority of risks, which emerge from economic factors to operational to environment.

For Example: - Once you invest in real-estate, the liquidity goes away and at the same it raises concern from increases in interest rates, property prices (fluctuate from environment or legislative changes). It also involves financial risk, and business risk, because when your interest rates rises, it becomes costly to finance the real-estate investments.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.