If an investor/manager believes she can increase the net operating income of a building then she...

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If an investor/manager believes she can increase the net operating income of a building then she...

If an investor/manager believes she can increase the net operating income of a building then she would probably view the current cap rate on the building as low and a potentially good investment. While other investors might see the property as overvalued.

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Answer 1

Answer #1

The given statement is true.

If an investor/manager believes she can increase the net operating income of a building then she would probably view the current cap rate on the building as low and a potentially good investment. While other investors might see the property as overvalued.

Since the current cap on building is the price to be paid for the building but since the manager believes that she can increase the income, the price will seem to be low to her, while other might not feel the same and see building as overvalued.

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Answer 2

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