Based on your understanding of the relation between risk and the phases of an income producing property's life, which phase would you expect to entail the highest risk?
A) Development and construction phase
B) Lease-up stage
C) Stable operation phase
D) All three stages of a property's life have similar and equal risk

Question

Quizplus · Accepted Answer

During the development and construction phase, the property is not generating any income yet, and there are often uncertainties such as delays, cost overruns, and zoning or permit issues that can increase the risk of the project's successful completion. Additionally, there is no guarantee of finding tenants or leasing the property once construction is finished. Therefore, this phase typically entails the highest risk.

Based on Your Understanding of the Relation Between Risk and the Phases