Question
1. Which of the indicators below would make an investment in a real estate project appear to be more risky? (Please mark all correct answers)
1. Which of the indicators below would make an investment in a real estate project appear to be more risky? (Please mark all correct answers)
The revenue stream will not be immediately available but will be generated only many years in the future
The project is located within a jurisdiction that has a history of expropriating real estate.
The probability that no renters/buyers will be interested in the project is high.
The project is situated in an area that frequently is object to hurricanes.
The market for the project is completely unsaturated, as nobody undertook a similar project in the past
2. Compare an investment in an apartment building with investments in AAA rated mortgage bonds. Which investment would be less risky? Please explain the factors that make this investment safer.
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