OPTIONS:

-Residential Property OR Commercial Property

-a closed-end mutual fund OR an open-end mutual fund

9. Choosing a real estate investment Comparing Real Estate Investments Suppose Kristen wants to invest in real estate and is considering two different residential properties. Based on the expected incomes and operating expenses of each, she estimates that the first property (property A) has an NOI of $50,000 and that the other property B) has an NOI of $32,000. If the cap rate is 9%, 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 Kristen to consider other factors. If she is a first-time investor, she is probably better off investing in property. (Round your answers to two decimal places.) Alternatively, Kristen might want to consider investing in a real estate investment trust (REIT), a type of investment company that operates similarly 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. They pay dividends. They can increase the diversification of individuals who are already invested in the stock market. All REITs own income-producing real estate such as office buildings and hotels