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Schach [20]
3 years ago
8

For beginning real-estate investors what are some advantages of REITs rather than direct purchase of property?

Business
1 answer:
amid [387]3 years ago
3 0
REITs keep you liquid and may be more cost efficient. Entering in a REIT also costs lower, and an individual can invest in a fund for less than 1,000 USD. It's kind of like buying into a stock too, in a sense that you can sell your REIT shares at your leisure. 

On one hand, direct real estate investment gives you more power over your finances as there is no fund manager - you are the one in charge and you decide who can rent and live in your property. Some say that investment returns are also bigger should you go for direct real estate. However, it should be noted that you're putting in a bigger amount (roughly upwards 100,000 USD - which few people may be ready to shell out) just to get started on direct property investment versus about USD 1,000 into REIT. 

At the end of the day, it's up to the investor to decide what sort of risk you're comfortable with. 
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A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 13,
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Answer:

Incremental income for Sale as scrap  is $36,400 and Rework is $46,200

Explanation:

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Cost to rework units (13000*4.6)                                         ($59,800)

Opportunity cost of not making new units

Incremental income (loss)                      $36,400              $46,200

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If each unit of output can be sold at a price of $5 and incurs variable costs which are constant at $3 per unit, and if the fixe
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Answer:

Break-even point= 15,000/ (5 - 3)= 7,500 units

Explanation:

Giving the following information:

Each unit of output can be sold for $5, variable costs are constant at $3 per unit, and if the fixed costs are $15,000.

We need to use the following formula:

Break-even point= fixed costs/ contribution margin

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Read 2 more answers
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