Real Estate Investment Quiz

What is a common management fee to assume for a large multi-family building...?

• 5 (Percent %)

• 1 (Percent %)

• 10 (Percent %)

• 15 (Percent %)

In what type of metering system can the electric bill be directly paid by the tenant, without having to be billed by the landlord...?

• Rent inclusion

• All of the above

• Direct meter

• Sub-meter

Which of the following properties would be considered the least risky as an investment...?

• Duplex apartment house

• 100 unit multi-family building

• Triplex apartment house

• 50 unit multi-family building

What determines the difference between the various types of net leases...?

• The square footage of the space being leased

• The terms of the lease

• The amount of expenses paid by the tenant

• The credit rating of the tenant

David purchased a $2,400,000 shopping center at a 4.5% cap rate. What is the NOI on the building...?

• $108,000 (Dollars)

• $525,325 (Dollars)

• $533,333 (Dollars)

• $115,500 (Dollars)

Capitalization rates do NOT take what into consideration...?

• NOI

• Debt service

• Risk

• Interest Rates

Which of the following is a common expense found in most commercial buildings...?

• Real estate taxes

• Management fees

• All of the answer choices provided are correct.

• Utilities

The replacement of a roof in a commercial building may be considered what type of expense...?

• Contract services

• General maintenance

• Capital expenditure

• General repairs

The capitalization rate of a property can be determined by which of the following formulas?

• Cap Rate = Income / Value

• Cap Rate = Income x value

• Cap Rate = Income + Value

• Cap Rate = Value / Income

What is the cap rate on a building that was purchased for $1,800,000 with an NOI of $95,000?

• 5.8 (Percent %)

• 5.3 (Percent %)

• 8.3 (Percent %)

• 6.4 (Percent %)