Question

Ahmad owns an apartment building and has recently had to lower the rent he charges, not only to attract new tenants but also to keep the ones he has. Which disadvantage of real estate investing is Ahmad most likely experiencing

Answer 1

Answer: Interest rate risk

Explanation:

Interest rate risk is described as the potential for investment loss which result from a change in interest rates. The increase in interest rate declines tell value if a bond or other fixed-income investment, the change that occurs in these bond price is known as duration. Generally, it is the risk that arises for bond owners from fluctuating interest rates. The interest rate risk of a bond depends on how sensitive it's price is to interest rate changes in the market