DC Property Management License
questions and answers passed
understand and implement the owner's goals and objectives - ANS ✔The primary responsibility
of a real estate property manager is to
Gross Potential Rental Income per month calculation ($800 x 20) + ($1500 x 30) =$61,000 per
month - ANS ✔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?
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. - ANS ✔Management Plan
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 - ANS ✔Market Analysis
identifes the subject property's strengths and weaknesses - ANS ✔Competitive Property
Analysis
theoretical costs and coresponding increase in rents by making different improvements, even
the subject property's redevelopment. - ANS ✔Analysis of 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 - ANS ✔Type of building alternatives
Physical Obsolescence, Functional Obsolescence, and Economic Obsolescence - ANS ✔Three
types of 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. - ANS ✔Physical
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is characterized by old or outdated designs or building systems.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single pane window systems because they waste a large amount of energy; outdated bathroom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. - ANS ✔Functional 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. - ANS ✔Economic Obsolescence
loss in value from the various forms of obsolescence. Depreciation can be economically
estimated on a broad level. - ANS ✔Depreciation
$12,000,000 - $1,500,000 = $10,500,000 Depreciated Value after 5 years - ANS ✔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 x 0.025 = $300,000 per year of Depreciated Value - ANS ✔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?
$300,000 x 5 years= $1,500,000 accumulated Depreciation - ANS ✔If a new 400 unit apartment
building is worth $12,000,000 and depreciates in value at 2.5% per year, what is its
Accumulated Depreciated Value after 1 year?
Investment Value, Assessed Value, Market Value, Depreciated Value - ANS ✔What are the
different types of property values?
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. - ANS ✔Investment 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". - ANS ✔Assessed Value
This is the value that is agreed to between a buyer and seller. It represents the "meeting of the
minds". - ANS ✔Market 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. - ANS ✔Depreciated Value
This is only the price that the owner has offered to sell a property for. - ANS ✔List Price
, formal and binding contract that establishes the authority and responsibilities that the manager
has on behalf of the owner and in operating the property - ANS ✔Management Agreement
•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 - ANS ✔A management agreement has the
following sections
• Sale or transfer of the property
• Improper financial reporting
• Stealing funds
• Negligence
• Taking kickbacks or benefiting directly from discounts from vendors
• Commingling funds - ANS ✔Management Agreement Termination Clauses
to collect similar information on all the properties. The purpose of this analysis is to not only
identify physical differences as well as strengths and weaknesses, but also to determine a value
questions and answers passed
understand and implement the owner's goals and objectives - ANS ✔The primary responsibility
of a real estate property manager is to
Gross Potential Rental Income per month calculation ($800 x 20) + ($1500 x 30) =$61,000 per
month - ANS ✔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?
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. - ANS ✔Management Plan
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 - ANS ✔Market Analysis
identifes the subject property's strengths and weaknesses - ANS ✔Competitive Property
Analysis
theoretical costs and coresponding increase in rents by making different improvements, even
the subject property's redevelopment. - ANS ✔Analysis of 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 - ANS ✔Type of building alternatives
Physical Obsolescence, Functional Obsolescence, and Economic Obsolescence - ANS ✔Three
types of 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. - ANS ✔Physical
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. - ANS ✔Functional 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. - ANS ✔Economic Obsolescence
loss in value from the various forms of obsolescence. Depreciation can be economically
estimated on a broad level. - ANS ✔Depreciation
$12,000,000 - $1,500,000 = $10,500,000 Depreciated Value after 5 years - ANS ✔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 x 0.025 = $300,000 per year of Depreciated Value - ANS ✔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?
$300,000 x 5 years= $1,500,000 accumulated Depreciation - ANS ✔If a new 400 unit apartment
building is worth $12,000,000 and depreciates in value at 2.5% per year, what is its
Accumulated Depreciated Value after 1 year?
Investment Value, Assessed Value, Market Value, Depreciated Value - ANS ✔What are the
different types of property values?
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. - ANS ✔Investment 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". - ANS ✔Assessed Value
This is the value that is agreed to between a buyer and seller. It represents the "meeting of the
minds". - ANS ✔Market 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. - ANS ✔Depreciated Value
This is only the price that the owner has offered to sell a property for. - ANS ✔List Price
, formal and binding contract that establishes the authority and responsibilities that the manager
has on behalf of the owner and in operating the property - ANS ✔Management Agreement
•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 - ANS ✔A management agreement has the
following sections
• Sale or transfer of the property
• Improper financial reporting
• Stealing funds
• Negligence
• Taking kickbacks or benefiting directly from discounts from vendors
• Commingling funds - ANS ✔Management Agreement Termination Clauses
to collect similar information on all the properties. The purpose of this analysis is to not only
identify physical differences as well as strengths and weaknesses, but also to determine a value
