DC Property Management License
1. The primary responsibility of a real estate property manager is to:
understand and implement the owner's goals and objectives
2. If an apartment building has 20 one bedroom units which rent for $800
per month and 30 two bedroom apartments which rent for $1500 per month,
what is the Gross Potential Rental Income per month?: Gross Potential Rental
Income per month calculation ($800 x 20) + ($1500 x 30) =$61,000 per month
3. Management Plan: The plan describes in detail the subject property's intended 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.
4. Market Analysis: 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
5. Competitive Property Analysis: identifes the subject property's strengths and
weaknesses
6. Analysis of Alternatives: theoretical costs and coresponding increase in rents by
making different improvements, even the subject property's redevelopment.
7. Type of building alternatives:
• Rehabilitate the property without altering its existing use
• Modernize the property by updating finishes, purchasing new or more efficient
equipment or enhancing existing features or amenities.
• Change the use of the building, including the conversion from one property type to
another (i.e. from industrial to single story office), or by demolishing it for a completely
new development.
,• Conversion to a condominium ownership structure
8. Three types of obsolescence: Physical Obsolescence, Functional Obsolescence,
and Economic Obsolescence
9. Physical Obsolescence: 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.
10. Functional Obsolescence: is characterized by old or outdated designs or building
systems. Examples include equipment that is not repairable because parts or no longer
manufactured;
single pane window systems because they waste a large amount of energy; outdated
bathroom fixtures because of changing designs and tastes.
11. Economic Obsolescence: 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.
12. Depreciation: loss in value from the various forms of obsolescence. Depreciation
can be economically estimated on a broad level.
13. If a new 400 unit apa1tment building is worth $12,000,000 and
depreciates in value at 2.5% per year, what is its
Depreciated Value after five years?: $12,000,000 - $1,500,000 = $10,500,000
Depreciated Value after
5 years
, .
14. If a new 400 unit apa1tment building is worth $12,000,000 and
depreciates in value at 2.5% per year, what is its
Depreciated Value after 1 year?: $12,000,000 x 0.025 = $300,000 per year of
Depreciated Value
15. If a new 400 unit apa1tment building is worth $12,000,000 and
depreciates in value at 2.5% per year, what is its
Accumulated Depreciated Value after 1 year?: $300,000 x 5 years= $1,500,000
accumulated
Depreciation
16. What are the different types of property values?: Investment Value, Assessed
Value, Market Value, Depreciated Value
17. 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.
18. 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".
19. Market Value: This is the value that is agreed to between a buyer and seller. It
represents the "meeting of the minds".
20. 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.
1. The primary responsibility of a real estate property manager is to:
understand and implement the owner's goals and objectives
2. If an apartment building has 20 one bedroom units which rent for $800
per month and 30 two bedroom apartments which rent for $1500 per month,
what is the Gross Potential Rental Income per month?: Gross Potential Rental
Income per month calculation ($800 x 20) + ($1500 x 30) =$61,000 per month
3. Management Plan: The plan describes in detail the subject property's intended 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.
4. Market Analysis: 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
5. Competitive Property Analysis: identifes the subject property's strengths and
weaknesses
6. Analysis of Alternatives: theoretical costs and coresponding increase in rents by
making different improvements, even the subject property's redevelopment.
7. Type of building alternatives:
• Rehabilitate the property without altering its existing use
• Modernize the property by updating finishes, purchasing new or more efficient
equipment or enhancing existing features or amenities.
• Change the use of the building, including the conversion from one property type to
another (i.e. from industrial to single story office), or by demolishing it for a completely
new development.
,• Conversion to a condominium ownership structure
8. Three types of obsolescence: Physical Obsolescence, Functional Obsolescence,
and Economic Obsolescence
9. Physical Obsolescence: 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.
10. Functional Obsolescence: is characterized by old or outdated designs or building
systems. Examples include equipment that is not repairable because parts or no longer
manufactured;
single pane window systems because they waste a large amount of energy; outdated
bathroom fixtures because of changing designs and tastes.
11. Economic Obsolescence: 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.
12. Depreciation: loss in value from the various forms of obsolescence. Depreciation
can be economically estimated on a broad level.
13. If a new 400 unit apa1tment building is worth $12,000,000 and
depreciates in value at 2.5% per year, what is its
Depreciated Value after five years?: $12,000,000 - $1,500,000 = $10,500,000
Depreciated Value after
5 years
, .
14. If a new 400 unit apa1tment building is worth $12,000,000 and
depreciates in value at 2.5% per year, what is its
Depreciated Value after 1 year?: $12,000,000 x 0.025 = $300,000 per year of
Depreciated Value
15. If a new 400 unit apa1tment building is worth $12,000,000 and
depreciates in value at 2.5% per year, what is its
Accumulated Depreciated Value after 1 year?: $300,000 x 5 years= $1,500,000
accumulated
Depreciation
16. What are the different types of property values?: Investment Value, Assessed
Value, Market Value, Depreciated Value
17. 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.
18. 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".
19. Market Value: This is the value that is agreed to between a buyer and seller. It
represents the "meeting of the minds".
20. 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.
