Apply It-Ch 16 Assignment - Real Estate and High-Risk Investments Terminology: Disadvantages of Investing in Real Estate Investing in real estate can be very lucrative, it is also risky, Before making a real estate investment, wise investors will make themselves familiar with the possible pitfalls of making such investments. Match the terms relating to dlsadvantages associated with real estate investments (on the right) with the descriptions or examples of those terms (on the left). Read all descriptions and examples before selecting the best match between each term and description. These are not complete definitions and examples, but there is only one correct answer for each term. The time needed to maintain proper records. Requires that buyer make francial predictions about future income and expenses. The cost of reviewing a purchase and sole agrement. Anrual expentes may exceed rental tevenues. Limited market for real estate sales may cause a cash fow crunch. The investment may not be profiable. Value decines due to tahure of neighbors with similar properties to pay their mortgages: Mediate dispules between occupants of the premites: Pehaps as high as 6-7\% of the sale price, seller may incur these costs simply because connership changes hands. New landscaping may be required atter a drought. Magdalena inherited $100,000. She fust made a down payment on a real estate investment of $65,000, Which disadvantage of real estate imvesting is best represented here? Interest rate risk Lack of diversincation Large initial investment