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Question of the Week - Alternative Investments

AdaptPrepAdaptPrep Des Moines, IA, USAPosts: 211 Sr Associate
edited February 2015 in Level 1 Questions
Which of the following represents the most significant advantage of real estate?

Question of the Week - Alternative Investments 38 votes

Properties can be an inflation hedge
92%
LeChiffreWesMantoothAdaptPrepsmdekhanedesantolwm247rsparksnitinStuj79RandallK27bhalb691JakeconomicsYeshankanchalrdxgcompolongojainabhishekcosgrobdswap272684RLaw 35 votes
Little work required to hold properties long-term
5%
thendry7Richie321 2 votes
No need to worry about governmental regulations
2%
lkumarbn 1 vote

Comments

  • Properties can be an inflation hedge
    What's the correct answer please?
  • AdaptPrepAdaptPrep Des Moines, IA, USAPosts: 211 Sr Associate
    Properties can be an inflation hedge

    The inflation hedge is the advantage to look for. When inflation hits the market, property values tend to increase accordingly. What you need to be careful for, though, is that this hedge isn't as effective if there is a long-term, fixed rent agreement.

    Here's why other potential answers aren't accurate:

    Little work required to hold properties long-term -- incorrect. Maintenance is required, and while a single handyman might be able to take care of a residential house, a team is required for most commercial properties.

    No need to worry about governmental regulations -- also not true. You also need to know the state and local government regulations.

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