DC PROPERTY MANAGEMENT LICENSE EXAM QUESTIONS WITH CORRECT
ANSWERS 2026
1. The primary responsibility of a real estate property manager is to: understand and
implement the owner's goals and objectives
2. 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?: Gross Potential Rental Income per month
calculation ($800 x 20) + ($1500 x 30) =$61,000 per month
3. Management Plan: 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.
4. Market Analysis: 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
5. Competitive Property Analysis: identifes the subject property's strengths and weaknesses
6. Analysis of Alternatives: theoretical costs and coresponding increase in rents by making ditterent
improvements, even the subject property's redevelopment.
7. Type of building alternatives: • Rehabilitate the property without altering its existing use
• Modernize the property by updating finishes, purchasing new or more eflcient 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 oflce), or by demolishing it for a completely new development.
• Conversion to a condominium ownership structure
8. Three types of obsolescence: Physical Obsolescence, Functional Obsolescence, and Economic Obso-
lescence
9. Physical Obsolescence: is characterized as a condition of aging (i.e. wear and tear) or deferred mainte-
nance. Examples are worn carpets, peeling paint, a leaking roof, or dead landscaping.
10. Functional Obsolescence: is characterized by old or outdated designs or building systems.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single pane window systems because they waste a large amount of energy; outdated bathroom fixtures because of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.
,DC PROPERTY MANAGEMENT LICENSE EXAM QUESTIONS WITH CORRECT
ANSWERS 2026
11. Economic Obsolescence: represents a loss in value due to outside forces (i.e. location, market condi-
tions). An example would be an oflce building, located in a small town, where the major employer closes. This may
result in both lower demand and rental rates.
12. Depreciation: loss in value from the various forms of obsolescence. Depreciation can be economically
estimated on a broad level.
13. 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 - $1,500,000 = $10,500,000 Depreciated Value after
5 years
14. 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?: $12,000,000 x 0.025 = $300,000 per year of Depreciated Value
15. 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?: $300,000 x 5 years= $1,500,000 accumulated
Depreciation
16. What are the different types of property values?: Investment Value, Assessed Value, Market
Value, Depreciated Value
17. Investment Value: 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.
18. Assessed Value: This is the value used by government tax assessment oflces. Since it is frequently deter-
mined 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".
19. Market Value: This is the value that is agreed to between a buyer and seller. It represents the "meeting of
the minds".
20. Depreciated Value: This is used for income tax purposes and attects a property's tax basis. In the past,
the Federal Government has implemented accelerated depreciation programs to help promote economic growth.
21. List Price: This is only the price that the owner has ottered to sell a property for.
22. Management Agreement: formal and binding contract that establishes the authority and responsibil-
ities that the manager has on behalf of the owner and in operating the property
, DC PROPERTY MANAGEMENT LICENSE EXAM QUESTIONS WITH CORRECT
ANSWERS 2026
23. A management agreement has the following sections: •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
24. Management Agreement Termination Clauses: • Sale or transfer of the property
• Improper financial reporting
• Stealing funds
• Negligence
• Taking kickbacks or benefiting directly from discounts from vendors
• Commingling funds
25. Comparison Analysis: to collect similar information on all the properties. The purpose of this analysis is
to not only identify physical ditterences 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.
26. A competitive residential property that offers studio apartments for $950 per
month also provides a health club for its residents. The health club's estimated
monthly value is $50. To be competitive, the subject property, which does not
have a health club, should offer its studio apartments for $ .: $900
27. A Comparison Analysis Includes:: • Locational advantages/Accessibility
• Curb Appeal
• Interior conditions, quality of finishes
ANSWERS 2026
1. The primary responsibility of a real estate property manager is to: understand and
implement the owner's goals and objectives
2. 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?: Gross Potential Rental Income per month
calculation ($800 x 20) + ($1500 x 30) =$61,000 per month
3. Management Plan: 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.
4. Market Analysis: 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
5. Competitive Property Analysis: identifes the subject property's strengths and weaknesses
6. Analysis of Alternatives: theoretical costs and coresponding increase in rents by making ditterent
improvements, even the subject property's redevelopment.
7. Type of building alternatives: • Rehabilitate the property without altering its existing use
• Modernize the property by updating finishes, purchasing new or more eflcient 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 oflce), or by demolishing it for a completely new development.
• Conversion to a condominium ownership structure
8. Three types of obsolescence: Physical Obsolescence, Functional Obsolescence, and Economic Obso-
lescence
9. Physical Obsolescence: is characterized as a condition of aging (i.e. wear and tear) or deferred mainte-
nance. Examples are worn carpets, peeling paint, a leaking roof, or dead landscaping.
10. Functional 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.
,DC PROPERTY MANAGEMENT LICENSE EXAM QUESTIONS WITH CORRECT
ANSWERS 2026
11. Economic Obsolescence: represents a loss in value due to outside forces (i.e. location, market condi-
tions). An example would be an oflce building, located in a small town, where the major employer closes. This may
result in both lower demand and rental rates.
12. Depreciation: loss in value from the various forms of obsolescence. Depreciation can be economically
estimated on a broad level.
13. 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 - $1,500,000 = $10,500,000 Depreciated Value after
5 years
14. 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?: $12,000,000 x 0.025 = $300,000 per year of Depreciated Value
15. 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?: $300,000 x 5 years= $1,500,000 accumulated
Depreciation
16. What are the different types of property values?: Investment Value, Assessed Value, Market
Value, Depreciated Value
17. Investment Value: 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.
18. Assessed Value: This is the value used by government tax assessment oflces. Since it is frequently deter-
mined 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".
19. Market Value: This is the value that is agreed to between a buyer and seller. It represents the "meeting of
the minds".
20. Depreciated Value: This is used for income tax purposes and attects a property's tax basis. In the past,
the Federal Government has implemented accelerated depreciation programs to help promote economic growth.
21. List Price: This is only the price that the owner has ottered to sell a property for.
22. Management Agreement: formal and binding contract that establishes the authority and responsibil-
ities that the manager has on behalf of the owner and in operating the property
, DC PROPERTY MANAGEMENT LICENSE EXAM QUESTIONS WITH CORRECT
ANSWERS 2026
23. A management agreement has the following sections: •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
24. Management Agreement Termination Clauses: • Sale or transfer of the property
• Improper financial reporting
• Stealing funds
• Negligence
• Taking kickbacks or benefiting directly from discounts from vendors
• Commingling funds
25. Comparison Analysis: to collect similar information on all the properties. The purpose of this analysis is
to not only identify physical ditterences 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.
26. A competitive residential property that offers studio apartments for $950 per
month also provides a health club for its residents. The health club's estimated
monthly value is $50. To be competitive, the subject property, which does not
have a health club, should offer its studio apartments for $ .: $900
27. A Comparison Analysis Includes:: • Locational advantages/Accessibility
• Curb Appeal
• Interior conditions, quality of finishes
