DC PROPERTY MANAGER TEST
QUESTIONS & DETAILED COMPLETE
SOLUTIONS PASSED 100%
Management Plan - Correct Answer ✔✔ The plan 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. These items will be discussed further in this
section.
Market Analysis - Correct Answer ✔✔ A ______ 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
By performing the ____________ and a ______________, it is easier to identify the
subject property's strengths and weaknesses. - Correct Answer ✔✔ Market Analysis,
Competitive Property Analysis
Analysis of Alternatives - Correct Answer ✔✔ Looks at the theoretical costs and
corresponding increase in rents by making different improvements, even the subject
property's redevelopment.
Physical Obsolescence - Correct Answer ✔✔ 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.
Functional Obsolescence - Correct Answer ✔✔ is characterized by old or outdated
designs or building systems. Examples include equipment that is not repairable
because parts or no longer manufactured; DC Property Management Study Guide - 3
single pane window systems because they waste a large amount of energy; outdated
bathroom fixtures because of changing designs and tastes.
Economic Obsolescence - Correct Answer ✔✔ 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 - Correct Answer ✔✔ Properties begin to deteriorate as soon as they are
completed. This process is called ____________. and it represents the loss in value
from the various forms of obsolescence. __________ can be economically estimated on
a broad level.
, If a new 400 unit apartment building is worth $12,000,000 and depreciates in value at
2.5% per year, what is its Depreciated Value after five years? - Correct Answer ✔✔
$12,000,000 x 0.025 = $300,000 per year of Depreciated Value $300,000 x 5 years =
$1,500,000 accumulated Depreciation $12,000,000 - $1,500,000 = $10,500,000
Depreciated Value after 5 years
Investment Value - Correct Answer ✔✔ 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
Assessed Value - Correct Answer ✔✔ 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".
Market Value - Correct Answer ✔✔ This is the value that is agreed to between a buyer
and seller. It represents the "meeting of the minds".
Depreciated Value - Correct 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
List Price - Correct Answer ✔✔ This is only the price that the owner has offered to sell a
property for
There are certain responsibilities and limitations that the manager needs to be aware of
and follow including .... - Correct Answer ✔✔ • Loyalty to the client
• 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
Comparison Analyis - Correct Answer ✔✔ The purpose of this analysis is to not only
identify physical differences as well as strengths and weaknesses, but also to determine
a value for each element and to make adjustments to the subject property's rental rate,
up or down, based on the results; helps determine if the subject property's rental rates
are appropriate for the market.
A Comparison Analysis form should include: - Correct Answer ✔✔ • Age of the
properties
• Locational advantages/Accessibility
• Curb Appeal • Interior conditions, quality of finishes • Amenities
QUESTIONS & DETAILED COMPLETE
SOLUTIONS PASSED 100%
Management Plan - Correct Answer ✔✔ The plan 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. These items will be discussed further in this
section.
Market Analysis - Correct Answer ✔✔ A ______ 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
By performing the ____________ and a ______________, it is easier to identify the
subject property's strengths and weaknesses. - Correct Answer ✔✔ Market Analysis,
Competitive Property Analysis
Analysis of Alternatives - Correct Answer ✔✔ Looks at the theoretical costs and
corresponding increase in rents by making different improvements, even the subject
property's redevelopment.
Physical Obsolescence - Correct Answer ✔✔ 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.
Functional Obsolescence - Correct Answer ✔✔ is characterized by old or outdated
designs or building systems. Examples include equipment that is not repairable
because parts or no longer manufactured; DC Property Management Study Guide - 3
single pane window systems because they waste a large amount of energy; outdated
bathroom fixtures because of changing designs and tastes.
Economic Obsolescence - Correct Answer ✔✔ 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 - Correct Answer ✔✔ Properties begin to deteriorate as soon as they are
completed. This process is called ____________. and it represents the loss in value
from the various forms of obsolescence. __________ can be economically estimated on
a broad level.
, If a new 400 unit apartment building is worth $12,000,000 and depreciates in value at
2.5% per year, what is its Depreciated Value after five years? - Correct Answer ✔✔
$12,000,000 x 0.025 = $300,000 per year of Depreciated Value $300,000 x 5 years =
$1,500,000 accumulated Depreciation $12,000,000 - $1,500,000 = $10,500,000
Depreciated Value after 5 years
Investment Value - Correct Answer ✔✔ 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
Assessed Value - Correct Answer ✔✔ 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".
Market Value - Correct Answer ✔✔ This is the value that is agreed to between a buyer
and seller. It represents the "meeting of the minds".
Depreciated Value - Correct 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
List Price - Correct Answer ✔✔ This is only the price that the owner has offered to sell a
property for
There are certain responsibilities and limitations that the manager needs to be aware of
and follow including .... - Correct Answer ✔✔ • Loyalty to the client
• 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
Comparison Analyis - Correct Answer ✔✔ The purpose of this analysis is to not only
identify physical differences as well as strengths and weaknesses, but also to determine
a value for each element and to make adjustments to the subject property's rental rate,
up or down, based on the results; helps determine if the subject property's rental rates
are appropriate for the market.
A Comparison Analysis form should include: - Correct Answer ✔✔ • Age of the
properties
• Locational advantages/Accessibility
• Curb Appeal • Interior conditions, quality of finishes • Amenities
