DC Property Management Exam Latest Update Graded A+

DC Property Management Exam Latest Update Graded A+ Management Plan 1. Current use 2. Current condition 3. Fiscal projections 4. Operational issues Market Analysis Regional and neighborhood evaluation focusing on: 1. Demographic conditions 2. Geographic features 3. Governmental perspective 4. Existing real estate supply 5. Future developments 6. Tenant demand Analysis of Alternatives Theoretical costs and potential for rent increase based on decision to: 1. Modernize 2. Rehabilitate 3. Change 4. Convert Capital Expenditures Projects that help extend a properties useful life. Three Types of Obsolescence 1. Physical Obsolescence is characterized as a condition of aging (i.e. wear and tear) or deferred maintenance. 2. Functional Obsolescence is characterized by old or outdated designs or building systems. 3. Economic Obsolescence represents a loss in value due to outside forces (i.e. location, market conditions). Five Types of Property Values 1. Investment Value - 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. 2. Assessed Value - 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". 3. Market Value - This is the value that is agreed to between a buyer and seller. It represents the "meeting of the minds". 4. Depreciated Value - 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. 5. List price - This is only the price that the owner has offered to sell a property for. Rules of Ethics 1. Loyalty to the client 2. Confidentiality 3. Accurate accounting and reporting 4. Protection of owner's funds 5. Conflicts of interest 6. Compliance with Laws and Regulations Management Agreement A formal and binding contract that establishes the authority and responsibilities that the manager has on behalf of the owner and in operating the property. It will assist the owner in meeting their goals and objectives