Commercial Real Estate Investing

Test your knowledge!

The answers can be found on the last page. 1. Commercial properties may refer to:

A. retail buildings B. office buildings C. apartment buildings D. all of the above

2. What is a “mixed use” building? 3. The best reason to invest in commercial rental property rather than residential is the ______________. 4. The Net Operating Income (NOI) of a commercial property is calculated by valuating the property's gross operating income and subtracting the ______________. 5. Commercial properties generally have an annual return off the purchase price between:

A. 1% and 6% B. 6% and 12% C. 12% and 18% D. 18% and 26%

6. To become a savvy real estate investor you must learn how to:

A. understand market conditions B. assess how much time and money is needed for rehabs C. deal with tenants and building maintenance D. all of the above

7. Income on commercial real estate is directly related to its usable___________________. 8. Commercial property leases are generally __________ than residential leases.

A. longer B. shorter

9. A good way to evaluate a commercial property is to:

A. study the neighborhood B. look for vacancies in the area C. talk to other neighborhood owners D. all of the above

10. Commercial property lenders like to see at least _________ down before they'll approve a loan.

A. 10% B. 15% C. 30% D. 45%

Answers: 1. D 2. a property that has a mix, such as retail, office and apartments. 3. earning potential 4. operating expenses 5. B 6. D 7. square footage 8. A 9. D 10. C Learn more about the current commercial property investment market here.