Colibri Real Estate 30-Hour Alabama Post License Practice Exam

What is a common disadvantage to investing in a two-to-four unit dwelling?

1. They are becoming harder to find.

2. They require extensive renovations.

3. They have high maintenance costs.

4. The rental market is oversaturated.

The correct answer is: They are becoming harder to find.

Investing in a two-to-four unit dwelling often comes with the common disadvantage relating to the availability of properties on the market. In many areas, these types of properties may be more scarce, especially in urban regions where demand for multifamily housing is significant. This can create challenges for investors looking to acquire such properties. The limited supply can lead to higher prices and increased competition among investors, making it more challenging to find a suitable investment opportunity. Additionally, the other options, while they may represent potential concerns in specific circumstances, do not broadly capture a common disadvantage across the market. For example, renovations or high maintenance costs can vary greatly depending on the specific property and its condition. The rental market's saturation is also a localized issue and not universally applicable, as it can differ dramatically between neighborhoods or cities. Thus, the general lack of availability stands out as a notable disadvantage for those looking to invest in two-to-four unit dwellings.