IAAO 102 ACTUAL EXAM 2026
COMPLETE QUESTIONS WITH
DETAILED VERIFIED ANSWERS |
ALREADY GRADED A+
What's a lease? - ANSWERConsidered both a contract and conveyance
Month to Month Lease - ANSWERshort term lease that May or may not me in
written form. This type of lease provides no security for the tenant or landlord.
Percentage Lease - ANSWERa contract which calls for a fixed minimum base
rent and a variable rent.
Gross Lease - ANSWERthe landlord is required to pay all operating expenses
associated with the real estate.
Net Lease - ANSWERthe tenant is required to pay all or part of the operating
expenses associated with the real estate.
Tenant improvements - ANSWERTerms of lease where it explains the extent of
the work that the landlord is willing to do in the form of a building or improvement
allowance.
Types of Rents - - ANSWER1. Market Rent
2. Contract Rent
3. Excess Rent
4. Percentage Rent
5. Deficit Rent
6. Effective Rent
Gross Leasable Area (GLA) - ANSWERincludes the entire area of the building
, Net Leasable Area (NLA) - ANSWERincludes only the floor area occupied by
the tenant.
Gross Income Multiplier - ANSWERrelationship between Effective gross income
(EGI) and the sales prices or property value
Misc. Income - ANSWERsome misc income could be parking fees, vending
machines, coin operated laundries, etc
Effective Gross Income (EGI) - ANSWERobtained after determining the
potential income for the property
What kind of expenses are capital improvements? - ANSWERImproper
Expenses.
Percentage Lease - ANSWERa contract that requires a fixed minimum base event
based on volume of business, sales, productivity, or use of the property by the
tenant is called ___________
Five Methods of Developing an overall capitalization rate - - ANSWER1.
Derivation from comparable **** This is the one on the test
2. Band of Investment Technique (Mortgage & Equity Components)
3. Net Income Ratio
4. Debt coverage ratio
5. Band of Investment Technique (LAND AND IMPROVEMENT
COMPONENTS)
Mortgage Capitalization Rate - ANSWERis the ratio of the annual principal and
interest payments to the amount borrowed.
Straight line Capitalization Assumption - ANSWER1. Assume a declining
income stream during the remaining economic life of improvements
2. Recapture received in equal amount during the remaining economic life of the
improvements
3. The property's overall yield (discounts) is receive don't eh balance of the
investment, after a periodic recapture of portion oft h improvement value
, Anticipation - ANSWERValue is created by the expectation of benefits to be
derived in the future
Substitution - ANSWERthe prices, rents, and rates of return of property tend to be
set by the current prices, rents and rates of return for equally desire able substitute
properties.
Contribution - ANSWERthe value of a component of real estate can be measured
by the amount it contributes to net operating income because net operating income
can be capitalized into value.
Market Value - ANSWERmeans the most probable price which a property should
bring in a competitive and open market under all conditions.
5 Analysis Questions for Investors - - ANSWER1. How much it cost?
2. How much will I get back?
3. When will I get it back?
4. What are the risk?
5. What are some comps ROI compared to my interested property?
Leverage - ANSWERborrowing of funds in hopes of earning a greater return than
the cost of the borrowed funds. This amount can be be negative, positive, or
neutral.
Mortgage - ANSWERmost common type of financing for real estate.
Junior Mortgage - ANSWERtypical a second mortgage
Chattel Mortgage - ANSWERa mortgage only on personal property.
Amortized Mortgage - ANSWERFixed rate mortgage permanent loan in which
the sum of the principal and interest payments remains fixed throughout the term
of the loan.
Four factors to capture overall yield rate (Yô) - - ANSWER1. Safe rate
2. Risk Rate
3. Rate for non-liquidity
4. Rate for Management
COMPLETE QUESTIONS WITH
DETAILED VERIFIED ANSWERS |
ALREADY GRADED A+
What's a lease? - ANSWERConsidered both a contract and conveyance
Month to Month Lease - ANSWERshort term lease that May or may not me in
written form. This type of lease provides no security for the tenant or landlord.
Percentage Lease - ANSWERa contract which calls for a fixed minimum base
rent and a variable rent.
Gross Lease - ANSWERthe landlord is required to pay all operating expenses
associated with the real estate.
Net Lease - ANSWERthe tenant is required to pay all or part of the operating
expenses associated with the real estate.
Tenant improvements - ANSWERTerms of lease where it explains the extent of
the work that the landlord is willing to do in the form of a building or improvement
allowance.
Types of Rents - - ANSWER1. Market Rent
2. Contract Rent
3. Excess Rent
4. Percentage Rent
5. Deficit Rent
6. Effective Rent
Gross Leasable Area (GLA) - ANSWERincludes the entire area of the building
, Net Leasable Area (NLA) - ANSWERincludes only the floor area occupied by
the tenant.
Gross Income Multiplier - ANSWERrelationship between Effective gross income
(EGI) and the sales prices or property value
Misc. Income - ANSWERsome misc income could be parking fees, vending
machines, coin operated laundries, etc
Effective Gross Income (EGI) - ANSWERobtained after determining the
potential income for the property
What kind of expenses are capital improvements? - ANSWERImproper
Expenses.
Percentage Lease - ANSWERa contract that requires a fixed minimum base event
based on volume of business, sales, productivity, or use of the property by the
tenant is called ___________
Five Methods of Developing an overall capitalization rate - - ANSWER1.
Derivation from comparable **** This is the one on the test
2. Band of Investment Technique (Mortgage & Equity Components)
3. Net Income Ratio
4. Debt coverage ratio
5. Band of Investment Technique (LAND AND IMPROVEMENT
COMPONENTS)
Mortgage Capitalization Rate - ANSWERis the ratio of the annual principal and
interest payments to the amount borrowed.
Straight line Capitalization Assumption - ANSWER1. Assume a declining
income stream during the remaining economic life of improvements
2. Recapture received in equal amount during the remaining economic life of the
improvements
3. The property's overall yield (discounts) is receive don't eh balance of the
investment, after a periodic recapture of portion oft h improvement value
, Anticipation - ANSWERValue is created by the expectation of benefits to be
derived in the future
Substitution - ANSWERthe prices, rents, and rates of return of property tend to be
set by the current prices, rents and rates of return for equally desire able substitute
properties.
Contribution - ANSWERthe value of a component of real estate can be measured
by the amount it contributes to net operating income because net operating income
can be capitalized into value.
Market Value - ANSWERmeans the most probable price which a property should
bring in a competitive and open market under all conditions.
5 Analysis Questions for Investors - - ANSWER1. How much it cost?
2. How much will I get back?
3. When will I get it back?
4. What are the risk?
5. What are some comps ROI compared to my interested property?
Leverage - ANSWERborrowing of funds in hopes of earning a greater return than
the cost of the borrowed funds. This amount can be be negative, positive, or
neutral.
Mortgage - ANSWERmost common type of financing for real estate.
Junior Mortgage - ANSWERtypical a second mortgage
Chattel Mortgage - ANSWERa mortgage only on personal property.
Amortized Mortgage - ANSWERFixed rate mortgage permanent loan in which
the sum of the principal and interest payments remains fixed throughout the term
of the loan.
Four factors to capture overall yield rate (Yô) - - ANSWER1. Safe rate
2. Risk Rate
3. Rate for non-liquidity
4. Rate for Management
