DC Property Manager Exam UPDATED
ACTUAL Exam Questions and CORECT
Answers
Management Plan - CORRECT 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 - CORRECT 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 - CORRECT ANSWER - This looks at the theoretical costs and
corresponding increase in rents by making different improvements, even the subject property's
redevelopment.
Capital Expenditures - CORRECT 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 - CORRECT 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 - CORRECT 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outdated designs or building systems.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of energy; outdated bathroom fixtures because of changing designs and tastes.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 - CORRECT 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 - CORRECT 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.
Depreciated Value - CORRECT 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 - CORRECT 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 - CORRECT 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 - 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. It's one way people like Donald Trump
can claim to be losing money every year.
List price - CORRECT ANSWER - This is the price that the owner has offered to sell a
property for.
Responsibilities and Limitations - CORRECT 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
Management Agreement - CORRECT 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
ACTUAL Exam Questions and CORECT
Answers
Management Plan - CORRECT 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 - CORRECT 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 - CORRECT ANSWER - This looks at the theoretical costs and
corresponding increase in rents by making different improvements, even the subject property's
redevelopment.
Capital Expenditures - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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.
Depreciated Value - CORRECT 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 - CORRECT 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 - CORRECT 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 - 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. It's one way people like Donald Trump
can claim to be losing money every year.
List price - CORRECT ANSWER - This is the price that the owner has offered to sell a
property for.
Responsibilities and Limitations - CORRECT 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
Management Agreement - CORRECT 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
