Accredited Residential Manager (ARM)
Certification / Institute of Real Estate
Management (IREM) Exam Questions
And Correct Answers (Verified Answers)
Plus Rationales 2026 Q&A | Instant
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1. A property manager notices that occupancy has declined for three
consecutive quarters despite competitive rental rates. Which action should
be taken first?
A. Reduce rent immediately
B. Analyze market and property performance data
C. Replace the leasing staff
D. Increase security deposits
Answer: B
Rationale: Effective property management begins with identifying the root cause
through market analysis and operational review before making financial or
staffing changes.
2. An ARM-certified manager is preparing an annual operating budget. Which
expense is considered variable?
A. Property taxes
B. Mortgage payment
C. Landscaping costs
D. Insurance premium
Answer: C
Rationale: Landscaping expenses fluctuate based on seasonal needs and service
contracts, making them variable expenses.
, 3. A tenant reports mold growth in a bathroom caused by poor ventilation.
What is the manager’s best immediate response?
A. Ignore the complaint until lease renewal
B. Notify the tenant to clean it personally
C. Arrange for inspection and remediation
D. Increase the tenant’s rent
Answer: C
Rationale: Managers must address health and safety concerns promptly to reduce
liability and maintain habitable conditions.
4. Which financial statement shows a property's profitability over a specific
period?
A. Balance sheet
B. Cash flow statement
C. Income statement
D. Rent roll
Answer: C
Rationale: The income statement details revenues and expenses to determine net
operating income.
5. A resident consistently pays rent after the grace period but before legal
notices are issued. What is the most appropriate management action?
A. Ignore the pattern
B. Begin eviction immediately
C. Document the behavior and enforce lease terms consistently
D. Waive late fees permanently
Answer: C
Rationale: Consistent enforcement protects fairness and reduces potential claims
of discrimination.
6. What is the primary purpose of preventive maintenance?
A. Increase advertising expenses
B. Reduce long-term repair costs and asset deterioration
C. Eliminate all emergency repairs
D. Raise tenant turnover
,Answer: B
Rationale: Preventive maintenance extends asset life and lowers major repair
expenses.
7. During a fair housing interview, an applicant asks whether families with
children live in the building. The manager should:
A. Identify family-occupied units
B. State that occupancy information cannot be discussed
C. Recommend another property
D. Ask the applicant why they want to know
Answer: B
Rationale: Discussing protected class demographics may violate fair housing laws.
8. Which metric measures the percentage of rental income actually collected?
A. Debt ratio
B. Economic occupancy
C. Capitalization rate
D. Expense ratio
Answer: B
Rationale: Economic occupancy evaluates actual revenue collected compared to
potential income.
9. A property manager receives a vendor invoice that exceeds the approved
contract amount. What should the manager do first?
A. Pay it immediately
B. Reject all future invoices
C. Review the contract and verify authorization for extra work
D. Terminate the vendor automatically
Answer: C
Rationale: Contract verification ensures accurate payment and proper
authorization.
10.Which lease clause protects a property owner from liability related to
tenant negligence?
A. Habendum clause
B. Indemnification clause
, C. Escalation clause
D. Assignment clause
Answer: B
Rationale: Indemnification clauses transfer certain risks and liabilities to the
responsible party.
11.A property’s net operating income is $240,000 and its market value is
$3,000,000. What is the capitalization rate?
A. 6%
B. 7%
C. 8%
D. 9%
Answer: C
Rationale: Cap rate = NOI ÷ Market Value = 240,000 ÷ 3,000,000 = 0.08 or 8%.
12.Which action best supports resident retention?
A. Delaying maintenance requests
B. Increasing lease violations
C. Providing responsive customer service
D. Reducing communication with residents
Answer: C
Rationale: Strong resident relations improve tenant satisfaction and retention.
13.A maintenance technician enters an occupied unit without notice for a non-
emergency repair. This may result in:
A. Increased NOI
B. Lease compliance
C. Violation of tenant privacy rights
D. Reduced vacancy loss
Answer: C
Rationale: Most jurisdictions require notice before non-emergency entry.
14.Which document outlines the income and expenses anticipated for the
upcoming year?
A. Trial balance
Certification / Institute of Real Estate
Management (IREM) Exam Questions
And Correct Answers (Verified Answers)
Plus Rationales 2026 Q&A | Instant
download Pdf
1. A property manager notices that occupancy has declined for three
consecutive quarters despite competitive rental rates. Which action should
be taken first?
A. Reduce rent immediately
B. Analyze market and property performance data
C. Replace the leasing staff
D. Increase security deposits
Answer: B
Rationale: Effective property management begins with identifying the root cause
through market analysis and operational review before making financial or
staffing changes.
2. An ARM-certified manager is preparing an annual operating budget. Which
expense is considered variable?
A. Property taxes
B. Mortgage payment
C. Landscaping costs
D. Insurance premium
Answer: C
Rationale: Landscaping expenses fluctuate based on seasonal needs and service
contracts, making them variable expenses.
, 3. A tenant reports mold growth in a bathroom caused by poor ventilation.
What is the manager’s best immediate response?
A. Ignore the complaint until lease renewal
B. Notify the tenant to clean it personally
C. Arrange for inspection and remediation
D. Increase the tenant’s rent
Answer: C
Rationale: Managers must address health and safety concerns promptly to reduce
liability and maintain habitable conditions.
4. Which financial statement shows a property's profitability over a specific
period?
A. Balance sheet
B. Cash flow statement
C. Income statement
D. Rent roll
Answer: C
Rationale: The income statement details revenues and expenses to determine net
operating income.
5. A resident consistently pays rent after the grace period but before legal
notices are issued. What is the most appropriate management action?
A. Ignore the pattern
B. Begin eviction immediately
C. Document the behavior and enforce lease terms consistently
D. Waive late fees permanently
Answer: C
Rationale: Consistent enforcement protects fairness and reduces potential claims
of discrimination.
6. What is the primary purpose of preventive maintenance?
A. Increase advertising expenses
B. Reduce long-term repair costs and asset deterioration
C. Eliminate all emergency repairs
D. Raise tenant turnover
,Answer: B
Rationale: Preventive maintenance extends asset life and lowers major repair
expenses.
7. During a fair housing interview, an applicant asks whether families with
children live in the building. The manager should:
A. Identify family-occupied units
B. State that occupancy information cannot be discussed
C. Recommend another property
D. Ask the applicant why they want to know
Answer: B
Rationale: Discussing protected class demographics may violate fair housing laws.
8. Which metric measures the percentage of rental income actually collected?
A. Debt ratio
B. Economic occupancy
C. Capitalization rate
D. Expense ratio
Answer: B
Rationale: Economic occupancy evaluates actual revenue collected compared to
potential income.
9. A property manager receives a vendor invoice that exceeds the approved
contract amount. What should the manager do first?
A. Pay it immediately
B. Reject all future invoices
C. Review the contract and verify authorization for extra work
D. Terminate the vendor automatically
Answer: C
Rationale: Contract verification ensures accurate payment and proper
authorization.
10.Which lease clause protects a property owner from liability related to
tenant negligence?
A. Habendum clause
B. Indemnification clause
, C. Escalation clause
D. Assignment clause
Answer: B
Rationale: Indemnification clauses transfer certain risks and liabilities to the
responsible party.
11.A property’s net operating income is $240,000 and its market value is
$3,000,000. What is the capitalization rate?
A. 6%
B. 7%
C. 8%
D. 9%
Answer: C
Rationale: Cap rate = NOI ÷ Market Value = 240,000 ÷ 3,000,000 = 0.08 or 8%.
12.Which action best supports resident retention?
A. Delaying maintenance requests
B. Increasing lease violations
C. Providing responsive customer service
D. Reducing communication with residents
Answer: C
Rationale: Strong resident relations improve tenant satisfaction and retention.
13.A maintenance technician enters an occupied unit without notice for a non-
emergency repair. This may result in:
A. Increased NOI
B. Lease compliance
C. Violation of tenant privacy rights
D. Reduced vacancy loss
Answer: C
Rationale: Most jurisdictions require notice before non-emergency entry.
14.Which document outlines the income and expenses anticipated for the
upcoming year?
A. Trial balance
