DC Property Manager Exam – Questions with
100% Correct Answers | Updated
Management Plan - ANSWER: This 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.
Market Analysis - ANSWER: This 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.
Analysis of Alternatives - ANSWER: This looks at the theoretical costs and
corresponding increase in rents by making different improvements, even
the subject property's redevelopment.
Capital Expenditures - ANSWER: Work performed on properties that are
occupied and operational with the goal of trying to prevent the property
from declining and becoming obsolete.
Physical Obsolescence - ANSWER: A status 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: A status 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outdated designs or building systems.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window systems because they waste a large amount of energy; outdated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.
Economic Obsolescence - ANSWER: A status that 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.
!@#$%^
Depreciation - ANSWER: The process by which properties begin to !@#$%^
deteriorate as soon as they are completed. It represents the loss in value &*()#$%
from the various forms of obsolescence. ^&*()#^
&*@#$
%^&
,DC Property Manager Exam – Questions with
100% Correct Answers | Updated
Depreciated Value - ANSWER: The amount value that a property loses per
year due to the various forms of obsolescence. Ex: $12,000,000 x 2.5%
(0.025) = $300,000 per year
Investment Value - ANSWER: An amount that is frequently determined
either by calculating the Net Operating Income and applying a
Capitalization Rate to it or from Cash Flow by determining the Return on
Investment.
Assessed Value - ANSWER: This is the value used by government tax
offices. Since it is frequently determined using sophisticated mathematical
models that are applied to many similar types of properties over a
geographic area, it can be less accurate and produce results that are
higher or lower than other types of "values".
Market Value - ANSWER: This is the value that is agreed to between a
buyer and seller. It represents the "meeting of the minds".
Depreciated Value - ANSWER: This is used for income tax purposes and
affects a property's tax basis. In the past, the Federal Government has
implemented accelerated depreciation programs to help promote economic
growth. It's one way people like Donald Trump can claim to be losing
money every year.
List price - ANSWER: This is the price that the owner has offered to sell a
property for.
Responsibilities and Limitations - ANSWER: • Loyalty to the client
• Confidentiality
• Accurate accounting and reporting
!@#$%^
• Protection of owner's funds (including not commingling the owner's funds
*&^%$#
with the manager's)
!@#$%^
• Conflicts of interest
• Compliance with Laws and Regulations !@#$%^
&*()#$%
^&*()#^
&*@#$
%^&
, DC Property Manager Exam – Questions with
100% Correct Answers | Updated
Management Agreement - ANSWER: The ______________ is 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.
Many of the provisions typically found in a ____________________ are as
follows:
• Provides the name of the owner and manager
• Specifies the term of the agreement
• Describes the property
• Describes the services provided by the manager
• Identifies who collects the rent payments
• Identifies in whose name all service contracts are to be made
• Describes when funds are to be disbursed
• Identifies whose employees work at the property
• Determines if fidelity bonds necessary
• Indicates how many bank accounts are needed and their purpose
• Identifies who maintains various building licenses (elevator, boiler, etc.)
• Provides insurance requirements and who secures the policies
• Specifies the management fee compensation
_______________________ typically last for many years. However, they
can be terminated for various reasons. The most common are:
• Sale or transfer of the property
• Improper financial reporting
• Stealing funds
• Negligence
• Taking kickbacks or benefiting directly from discounts from vendors
• Commingling funds
Owner's Objective - ANSWER: It is this that should determine all of the
recommendations and decisions related to the property. For example, the
manager prepares an annual budget, including staffing levels, marketing
!@#$%^
plans, and capital expenditures, but it is the owner who accepts or modifies
*&^%$#
the budget. The manager can make recommendations to renovate a
!@#$%^
building or to change common area finishes, but the owner makes the final
decision. Similarly, when it becomes time to sell a property, the manager !@#$%^
can make suggestions to enhance its appeal, but the owner decides which, &*()#$%
if any, improvements will be made prior to sale. ^&*()#^
&*@#$
%^&
100% Correct Answers | Updated
Management Plan - ANSWER: This 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.
Market Analysis - ANSWER: This 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.
Analysis of Alternatives - ANSWER: This looks at the theoretical costs and
corresponding increase in rents by making different improvements, even
the subject property's redevelopment.
Capital Expenditures - ANSWER: Work performed on properties that are
occupied and operational with the goal of trying to prevent the property
from declining and becoming obsolete.
Physical Obsolescence - ANSWER: A status 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: A status 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.
Economic Obsolescence - ANSWER: A status that 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.
!@#$%^
Depreciation - ANSWER: The process by which properties begin to !@#$%^
deteriorate as soon as they are completed. It represents the loss in value &*()#$%
from the various forms of obsolescence. ^&*()#^
&*@#$
%^&
,DC Property Manager Exam – Questions with
100% Correct Answers | Updated
Depreciated Value - ANSWER: The amount value that a property loses per
year due to the various forms of obsolescence. Ex: $12,000,000 x 2.5%
(0.025) = $300,000 per year
Investment Value - ANSWER: An amount that is frequently determined
either by calculating the Net Operating Income and applying a
Capitalization Rate to it or from Cash Flow by determining the Return on
Investment.
Assessed Value - ANSWER: This is the value used by government tax
offices. Since it is frequently determined using sophisticated mathematical
models that are applied to many similar types of properties over a
geographic area, it can be less accurate and produce results that are
higher or lower than other types of "values".
Market Value - ANSWER: This is the value that is agreed to between a
buyer and seller. It represents the "meeting of the minds".
Depreciated Value - ANSWER: This is used for income tax purposes and
affects a property's tax basis. In the past, the Federal Government has
implemented accelerated depreciation programs to help promote economic
growth. It's one way people like Donald Trump can claim to be losing
money every year.
List price - ANSWER: This is the price that the owner has offered to sell a
property for.
Responsibilities and Limitations - ANSWER: • Loyalty to the client
• Confidentiality
• Accurate accounting and reporting
!@#$%^
• Protection of owner's funds (including not commingling the owner's funds
*&^%$#
with the manager's)
!@#$%^
• Conflicts of interest
• Compliance with Laws and Regulations !@#$%^
&*()#$%
^&*()#^
&*@#$
%^&
, DC Property Manager Exam – Questions with
100% Correct Answers | Updated
Management Agreement - ANSWER: The ______________ is 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.
Many of the provisions typically found in a ____________________ are as
follows:
• Provides the name of the owner and manager
• Specifies the term of the agreement
• Describes the property
• Describes the services provided by the manager
• Identifies who collects the rent payments
• Identifies in whose name all service contracts are to be made
• Describes when funds are to be disbursed
• Identifies whose employees work at the property
• Determines if fidelity bonds necessary
• Indicates how many bank accounts are needed and their purpose
• Identifies who maintains various building licenses (elevator, boiler, etc.)
• Provides insurance requirements and who secures the policies
• Specifies the management fee compensation
_______________________ typically last for many years. However, they
can be terminated for various reasons. The most common are:
• Sale or transfer of the property
• Improper financial reporting
• Stealing funds
• Negligence
• Taking kickbacks or benefiting directly from discounts from vendors
• Commingling funds
Owner's Objective - ANSWER: It is this that should determine all of the
recommendations and decisions related to the property. For example, the
manager prepares an annual budget, including staffing levels, marketing
!@#$%^
plans, and capital expenditures, but it is the owner who accepts or modifies
*&^%$#
the budget. The manager can make recommendations to renovate a
!@#$%^
building or to change common area finishes, but the owner makes the final
decision. Similarly, when it becomes time to sell a property, the manager !@#$%^
can make suggestions to enhance its appeal, but the owner decides which, &*()#$%
if any, improvements will be made prior to sale. ^&*()#^
&*@#$
%^&
