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DC Property Manager Test Questions and Answers
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DC Property Manager Test Questions and Answers
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DC Property Manager Test Questionsand Answers
Management Plan - Answer -The plan describes in detail the subject property's current
use along with its physical condition, fiscal projections, and any operational issues. It
also includes an analysis of the market (both regional and neighborhood), the
competing properties, as well as potential improvements or alternative uses for the
subject property. These items will be discussed further in this section.
Market Analysis - Answer -A ______ focuses on both a regional and neighborhood
evaluation, which includes the demographic conditions, geographic features,
governmental prospective, existing real estate supply, potential future developments,
and tenant/ resident demand
By performing the ____________ and a ______________, it is easier to identify the
subject property's strengths and weaknesses. - Answer -Market Analysis, Competitive
Property Analysis
Analysis of Alternatives - Answer -Looks at the theoretical costs and corresponding
increase in rents by making different improvements, even the subject property's
redevelopment.
Physical Obsolescence - Answer -is characterized as a condition of aging (i.e. wear and
tear) or deferred maintenance. Examples are worn carpets, peeling paint, a leaking roof,
or dead landscaping.
Functional Obsolescence - Answer -is characterized by old or outdated designs or
building systems. Examples include equipment that is not repairable because parts or
no longer manufactured; DC Property Management Study Guide - 3 single pane window
systems because they waste a large amount of energy; outdated bathroom fixtures
because of changing designs and tastes.
Economic Obsolescence - Answer -represents a loss in value due to outside forces (i.e.
location, market conditions). An example would be an office building, located in a small
town, where the major employer closes. This may result in both lower demand and
rental rates.
Depreciation - Answer -Properties begin to deteriorate as soon as they are completed.
This process is called ____________. and it represents the loss in value from the
, various forms of obsolescence. __________ can be economically estimated on a broad
level.
If a new 400 unit apartment building is worth $12,000,000 and depreciates in value at
2.5% per year, what is its Depreciated Value after five years? - Answer -$12,000,000 x
0.025 = $300,000 per year of Depreciated Value $300,000 x 5 years = $1,500,000
accumulated Depreciation $12,000,000 - $1,500,000 = $10,500,000 Depreciated Value
after 5 years
Investment Value - Answer -This is the value that is generally used by investors. It is
frequently determined either by calculating the Net Operating Income and applying a
Capitalization Rate to it or from Cash Flow by determining the Return on Investment
Assessed Value - Answer -This is the value used by government tax assessment
offices. Since it is frequently determined using sophisticated mathematical models that
are applied to many similar types of properties over a geographic area, it can be less
accurate and produce results that are higher or lower than other types of "values".
Market Value - Answer -This is the value that is agreed to between a buyer and seller. It
represents the "meeting of the minds".
Depreciated Value - Answer -This is used for income tax purposes and affects a
property's tax basis. In the past, the Federal Government has implemented accelerated
depreciation programs to help promote economic growth
List Price - Answer -This is only the price that the owner has offered to sell a property
for
There are certain responsibilities and limitations that the manager needs to be aware of
and follow including .... - Answer -• Loyalty to the client
• Accurate accounting and reporting
• Protection of owner's funds (including not commingling the owner's funds with the
manager's)
• Conflicts of interest
• Compliance with Laws and Regulations
Comparison Analyis - Answer -The purpose of this analysis is to not only identify
physical differences as well as strengths and weaknesses, but also to determine a value
for each element and to make adjustments to the subject property's rental rate, up or
down, based on the results; helps determine if the subject property's rental rates are
appropriate for the market.
A Comparison Analysis form should include: - Answer -• Age of the properties
• Locational advantages/Accessibility
• Curb Appeal • Interior conditions, quality of finishes • Amenities
• Rents per square foot (commercial) or Rents per unit (apartments)
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