DC PROPERTY MANAGERS UPDATED FINAL
EXAMS QUESTIONS AND ANSWERS SURE A+
✔✔Economic Obsolesence - ✔✔Represents a loss in value due to outside forces (i.e.
location, market conditions). Examples would be an office building, locates in a small
town, where the major employer closes.
✔✔Investment Value - ✔✔A value generally used by investors
✔✔Assessed Value - ✔✔The value used by government tax assessment offices
✔✔Market Value - ✔✔The value that is agreed to between a buyer & seller
✔✔Rules of Ethics for Property Manager - ✔✔Loyalty to client, confidentiality, accurate
accounting & reporting, protection of owner's funds, conflicts of interest, and compliance
with law regulations.
✔✔An owner can be directly affected by manager's..... - ✔✔Improper handling of
evictions, unlawful rent collections, failure to return security deposits, not maintaining
proper compliance with the Rental Accommodations Division (RAD)
✔✔The Management Agreement - ✔✔is a formal and binding contract that establishes
the authority and responsibilities that a manager has on behalf of the owner.
✔✔Name of the owner & manager, term of agreement, describes the property,
describes services provided by manager, identifies who collects rental payments,
identifies whose name all service contracts are to be made, when funds are disbursed,
whose employees work at the property, bank accounts, fidelity bonds, identifies building
licenses, insurance requirements/ who secures policies, and management fees
compensation - ✔✔Some provisions outlined in the Management Agreement include:
, ✔✔Reasons for termination of Management Agreement - ✔✔Sale or transfer of the
property, improper financial reporting, stealing funds, negligence, taking kickbacks or
benefiting directly from discounts from vendors, commingling funds.
✔✔Comparison Analysis - ✔✔Helps determine if the subject property's rental rates are
appropriate for the market.
✔✔A Comparison Analysis should include: - ✔✔Locational advantages/Accessibility,
Curb Appeal, Interior conditions, quality of finishes, Amenities, Rents per square foot,
Operating expenses per square foot
✔✔The purpose of a Budget is to................ - ✔✔Develop a means to track the
property's performance & and to organize various types of income.
✔✔Gross Potential Rent - ✔✔The maximum amount of income that a property can
generate from all sources.
✔✔Pass-Through Income, Expense Reimbursement, or Recoveries - ✔✔Commercial
leases tenants can be billed for some or all of the property's operating expenses, real
estate taxes and insurance.
✔✔Vacancy & Credit Loss - ✔✔When actual income collected is less than Gross
Potential Rental Income (typically a commercial lease)
✔✔Effective Gross Income equation - ✔✔is the net effective of Gross Potential plus (+)
Expense Reimbursements minus (-) Vacancy Credit Loss plus (+) Miscellaneous
Income.
✔✔Net Operating Income (NOI) - ✔✔Represents the money that remains after the
Operating Expenses are subtracted from Effective Gross Income.
✔✔Debt Service - ✔✔includes both interest and principal reduction and is subtracted
from Net Operating Income.
✔✔Examples of Capital Expenditures include...... - ✔✔Improvements to a property that
update appearance, replacement of major mechanical equipment (boilers), replacement
of major building system (roof), renovating space, replacing old appliances.
✔✔Escrow Accounts & Reserves - ✔✔In order for the owner to prepare for significant
Capital Expenditures, it is common to establish an
✔✔Gross Lease - ✔✔The property owner pays all Operating Expenses up to a certain
amount. Commonly found in office spaces.
EXAMS QUESTIONS AND ANSWERS SURE A+
✔✔Economic Obsolesence - ✔✔Represents a loss in value due to outside forces (i.e.
location, market conditions). Examples would be an office building, locates in a small
town, where the major employer closes.
✔✔Investment Value - ✔✔A value generally used by investors
✔✔Assessed Value - ✔✔The value used by government tax assessment offices
✔✔Market Value - ✔✔The value that is agreed to between a buyer & seller
✔✔Rules of Ethics for Property Manager - ✔✔Loyalty to client, confidentiality, accurate
accounting & reporting, protection of owner's funds, conflicts of interest, and compliance
with law regulations.
✔✔An owner can be directly affected by manager's..... - ✔✔Improper handling of
evictions, unlawful rent collections, failure to return security deposits, not maintaining
proper compliance with the Rental Accommodations Division (RAD)
✔✔The Management Agreement - ✔✔is a formal and binding contract that establishes
the authority and responsibilities that a manager has on behalf of the owner.
✔✔Name of the owner & manager, term of agreement, describes the property,
describes services provided by manager, identifies who collects rental payments,
identifies whose name all service contracts are to be made, when funds are disbursed,
whose employees work at the property, bank accounts, fidelity bonds, identifies building
licenses, insurance requirements/ who secures policies, and management fees
compensation - ✔✔Some provisions outlined in the Management Agreement include:
, ✔✔Reasons for termination of Management Agreement - ✔✔Sale or transfer of the
property, improper financial reporting, stealing funds, negligence, taking kickbacks or
benefiting directly from discounts from vendors, commingling funds.
✔✔Comparison Analysis - ✔✔Helps determine if the subject property's rental rates are
appropriate for the market.
✔✔A Comparison Analysis should include: - ✔✔Locational advantages/Accessibility,
Curb Appeal, Interior conditions, quality of finishes, Amenities, Rents per square foot,
Operating expenses per square foot
✔✔The purpose of a Budget is to................ - ✔✔Develop a means to track the
property's performance & and to organize various types of income.
✔✔Gross Potential Rent - ✔✔The maximum amount of income that a property can
generate from all sources.
✔✔Pass-Through Income, Expense Reimbursement, or Recoveries - ✔✔Commercial
leases tenants can be billed for some or all of the property's operating expenses, real
estate taxes and insurance.
✔✔Vacancy & Credit Loss - ✔✔When actual income collected is less than Gross
Potential Rental Income (typically a commercial lease)
✔✔Effective Gross Income equation - ✔✔is the net effective of Gross Potential plus (+)
Expense Reimbursements minus (-) Vacancy Credit Loss plus (+) Miscellaneous
Income.
✔✔Net Operating Income (NOI) - ✔✔Represents the money that remains after the
Operating Expenses are subtracted from Effective Gross Income.
✔✔Debt Service - ✔✔includes both interest and principal reduction and is subtracted
from Net Operating Income.
✔✔Examples of Capital Expenditures include...... - ✔✔Improvements to a property that
update appearance, replacement of major mechanical equipment (boilers), replacement
of major building system (roof), renovating space, replacing old appliances.
✔✔Escrow Accounts & Reserves - ✔✔In order for the owner to prepare for significant
Capital Expenditures, it is common to establish an
✔✔Gross Lease - ✔✔The property owner pays all Operating Expenses up to a certain
amount. Commonly found in office spaces.
