Making a Sound Investment Decision Reading Answers

Making a Sound Investment Decision Reading Answers are provided below. These will help you evaluate your performance. It has 14 questions of two different question types.

Table of contents:

• Solution for Making a Sound Investment Decision
• Making a Sound Investment Decision IELTS Reading Practice Test
• Passage
• Questions
• Answers with Explanations

Solution for Making a Sound Investment Decision

In the table given below, you have the Making a Sound Investment Decision reading answers. Evaluate your score using them to know your performance.

Answer Table

27. Stock market instability	28. Real estate	29. Hunt for foreclosure	30. Mortgage repayments
31. Their money	32. Bargains/Bargain property	33. Borrow too much/over-borrow	34. Yes
35. No	36. Yes	37. No	38. Yes
39. No	40. Not Given

Making a Sound Investment Decision IELTS Reading Practice Test - Exam Review

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The Making a Sound Investment Decision IELTS reading practice test is given here. Read the question properly and understand what information you are asked for, before locating and answering.

Passage

You have been given the Making a Sound Investment Decision reading passage below. Spend around 20 minutes solving this passage which consists of 14 questions. Read the passage carefully and swiftly before answering. We have also provided Making a Sound Investment Decision reading answers with locations.

Making a Sound Investment Decision

1. As investors tire of stock market instability, the idea of owning a piece of real estate is gaining in popularity. Now, not everyone has what it takes to become a landlord, but if you can make a go of it, it certainly has the potential to become a good money-earner. Here are some tips from successful real estate mogul, Janet Anderson, on how to start building up your property portfolio.
   
   
2. According to Janet, one of the best ways to identify a bargain is to hunt for foreclosures. Foreclosures are properties, banks have repossessed because their owners were unable to meet the mortgage repayments. Banks want a quick sell on these places, Janet says. They want to cut their losses and get their money back as quickly as possible. Developing a network - making connections with city clerks and bank employees who know which properties are about to be sold - can be an excellent way to identify such bargains. And bargains they certainly can prove to be; in a recent firesale auction ('firesale auction' is the phrase that has been coined to describe auction-room events dedicated entirely to the disposal of repossessed assets) a house with a market value nearing $1,000,000, but with a low reserve price designed to encourage bidders and secure a quick sale, went for $450,000; that's a whopping 55% discount.
   
   
3. It's also important to be realistic though and not stretch yourself too far financially. Janet says the biggest mistake you can make is to borrow too much or over-borrow. For first-time investors, lenders usually demand bigger down payments because you haven't got a proven track record. That's more of your money on the table and, therefore, should anything go wrong, you're in for a big financial hit.
   
   
4. Her business partner, James Nylles, is in complete agreement on this point. He also highlights the fact that mortgage payments and deposits are only part of the long-term cost of buying a rental property. There is also the cost of repairs, administration and maintenance, rental manager's fees, insurance, and so on, all of which require you to hold a significant amount of money in reserve. Failure to factor this in when calculating how much you can afford to part with in mortgage repayments can lead to disaster.
   
   
5. One of the biggest traps for first-time investors, according to Nylles, is the temptation to pay over the odds to get the property you desire. Buyers often get carried away, especially in the auction-room setting, which can get quite competitive and even descend into a racket of one-upmanship. They end up paying top-dollar and landing themselves in a financial situation they can ill afford to be in. Remember, you are in the property game to make money, so the more money you have to pay upfront for a property, the less likely you are to recoup your investment in the long run. The good news, however, is that the housing market is not very hot at the moment, which means the danger of overpaying is not so great. Always set emotions to one side and think from a purely business perspective. The question of your liking or disliking the property is irrelevant. As Nylles points out: "you will not be living there." Business decisions are made in the cold hard light of day; your objective is to minimize your outlay and maximize your return. Whether you secure a huge home in pristine condition or a tiny flat with barely room to stretch in is irrelevant - if the tiny flat gets you a better return on your investment then the choice is a no-brainer.
   
   
6. And last of all, do your homework. You've got to get to know the location in which you are going to invest. Look out for areas which are earmarked for government investment. Urban renewal areas are often very attractive since house and rental prices in such places are low right now but can be expected to rise in the not too distant future. The range of local amenities, safety, and the state of the local economy are all important factors to consider, too. As the old saying goes, 'location, location, location'. Invest in a good location and you will maximize your rental income.

Questions

Questions 27 - 33

Answer the questions below using NO MORE THAN THREE WORDS for each answer.

27. What are investors getting fed up with?
28. Janet Anderson is involved in the sale of the property. What is another phrase used in paragraph 1 to describe this type of business?
29. What is one of the best ways to identify a bargain in the property market?
30. Failure to meet your what, can cause your home to be repossessed?
31. What do banks want to get back quickly on foreclosed properties?
32. Developing networks is an excellent way to find what?
33. What is the biggest error of judgment first-time investors can make, according to Anderson?

Questions 34 - 40

Do the following statements agree with the information given in Reading Passage?
In spaces 34 - 40 below, write
YES - if the statement agrees with the writer's views
NO - if the statement doesn't agree with the writer's views
NOT GIVEN - if it is impossible to say what the writer thinks about this

34. Banks demand larger deposits from first-time property investors.

35. By making a larger deposit, investors can limit their personal financial risk.

36. There are a lot of long-term costs to take into consideration before purchasing a rental property.

37. Banks require you to hold a lot of money in reserve to meet your long-term property maintenance costs.

38. Many investors are tempted to pay more than they should for their investment properties.

39. At the moment, house prices are extremely high in general.

40. There are a lot of urban renewal projects that have been earmarked by the government.

Answers for Making a Sound Investment Decision with Explanations

The Making a Sound Investment Decision reading answers with explanations are provided below. They will help you in assessing your reading skills and band score. As well as help you in rectifying your mistakes.

27. Answer: Stock Market Instability
Explanation: Paragraph 1, Line 1. As investors tire of stock market instability, the idea of owning a piece of real estate is gaining in popularity.

28. Answer: Real Estate
Explanation: Paragraph 1, Line 4. Here are some tips from successful real estate mogul, Janet Anderson, on how to start building up your property portfolio. In the line above, Janet is referred to as a successful real estate mogul. Hence, the answer to the question is real estate.

29. Answer: Hunt for foreclosure
Explanation: Paragraph 2, Line 1. According to Janet, one of the best ways to identify a bargain is to hunt for foreclosures. 

30. Answer: Mortgage repayments
Explanation: Paragraph 2, Line 2. Foreclosures are properties, banks have repossessed because their owners were unable to meet the mortgage repayments.

31. Answer: Their money
Explanation: Paragraph 2, Line 4. They want to cut their losses and get their money back as quickly as possible.

32. Answer: Bargains/Bargain property
Explanation: Paragraph 2, Line 5. Developing a network - making connections with city clerks and bank employees who know which properties are about to be sold - can be an excellent way to identify such bargains.

33. Answer: Borrow too much/Over-borrow
Explanation: Paragraph 3, Line 1. It's also important to be realistic though and not stretch yourself too far financially. Janet says the biggest mistake you can make is to borrow too much or over-borrow.

34. Answer: Yes
Explanation: Paragraph 3, Line 3. For first-time investors, lenders usually demand bigger down payments because you haven't got a proven track record. 

35. Answer: No
Explanation: Paragraph 3, Line 4. That's more of your money on the table and, therefore, should anything go wrong, you're in for a big financial hit. Janet has explained here that if things did not work out, then the money in question would be the investor’s money, hence, they will be taking the hit. This contradicts the question statement, hence, the answer is no.

36. Answer: Yes
Explanation: Paragraph 4, Line 2. He also highlights the fact that mortgage payments and deposits are only part of the long-term cost of buying a rental property. There is also the cost of repairs, administration and maintenance, rental manager's fees, insurance, and so on, all of which require you to hold a significant amount of money in reserve.

37. Answer: No
Explanation: Paragraph 4, Line 3. There is also the cost of repairs, administration and maintenance, rental manager's fees, insurance, and so on, all of which require you to hold a significant amount of money in reserve. It is the rental property, which requires an investor to have money in reserve for their maintenance and such, not the bank.

38. Answer: Yes
Explanation: Paragraph 5, Line 1. One of the biggest traps for first-time investors, according to Nylles, is the temptation to pay over the odds to get the property you desire.

39. Answer: No
Explanation: Paragraph 6, Line 3. Urban renewal areas are often very attractive since house and rental prices in such places are low right now but can be expected to rise in the not too distant future. As the line says, currently in the urban renewal areas the rental and house sale prices are low. Therefore, the answer is no.

40. Answer: Not Given
Explanation: Not Available. There is no relevant information regarding this in the passage.

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