DC PROPERTY MANAGEMENT EXAM
Questions and Answers
1.Management Plan: 1. Current use
2. Current condition
3. Fiscal projections
4. Operational issues
2. Market Analysis: Regional and neighborhood evaluation focusing on:
1.Demographic conditions
2.Geographic features
3.Governmental perspective
4.Existing real estate supply
5.Future developments
6.Tenant demand
3.Analysis of Alternatives: Theoretical costs and potential for rent
increase based on decision to:
1.Modernize
2.Rehabilitate
3.Change
4.Convert
4.Capital Expenditures: Projects that help extend a properties useful life.
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,5.Three Types of Obsolescence: 1. Physical Obsolescence is
characterized as a condition of aging (i.e. wear and tear) or deferred
maintenance.
2.Functional Obsolescence is characterized by old or outdated designs
or building systems.
3.Economic Obsolescence represents a loss in value due to outside
forces (i.e. location, market conditions).
6.Five Types of Property Values: 1. 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.
2.Assessed 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".
3.Market Value - This is the value that is agreed to between a buyer
and seller. It represents the "meeting of the minds".
4.Depreciated Value - This is used for income tax purposes and affects
a property's tax basis. In the past, the Federal Government has
implemented accelerated depre- ciation programs to help promote
economic growth.
5.List price - This is only the price that the owner has offered to sell a
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, property for.
7. Rules of Ethics: 1. Loyalty to the client
2.Confidentiality
3.Accurate accounting and reporting
4.Protection of owner's funds
5.Conflicts of interest
6.Compliance with Laws and Regulations
8.Management Agreement: 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. It will assist the
owner in meeting their goals and objectives as well as maximizing the
property's value and return.
9.Grounds for Termination of Management Agreement: 1. Sale or transfer
of the property
2.Improper financial reporting
3.Improper financial reporting
4.Negligence
5.Commingling funds
10.Comparison Analysis: 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
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Questions and Answers
1.Management Plan: 1. Current use
2. Current condition
3. Fiscal projections
4. Operational issues
2. Market Analysis: Regional and neighborhood evaluation focusing on:
1.Demographic conditions
2.Geographic features
3.Governmental perspective
4.Existing real estate supply
5.Future developments
6.Tenant demand
3.Analysis of Alternatives: Theoretical costs and potential for rent
increase based on decision to:
1.Modernize
2.Rehabilitate
3.Change
4.Convert
4.Capital Expenditures: Projects that help extend a properties useful life.
1/
17
,5.Three Types of Obsolescence: 1. Physical Obsolescence is
characterized as a condition of aging (i.e. wear and tear) or deferred
maintenance.
2.Functional Obsolescence is characterized by old or outdated designs
or building systems.
3.Economic Obsolescence represents a loss in value due to outside
forces (i.e. location, market conditions).
6.Five Types of Property Values: 1. 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.
2.Assessed 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".
3.Market Value - This is the value that is agreed to between a buyer
and seller. It represents the "meeting of the minds".
4.Depreciated Value - This is used for income tax purposes and affects
a property's tax basis. In the past, the Federal Government has
implemented accelerated depre- ciation programs to help promote
economic growth.
5.List price - This is only the price that the owner has offered to sell a
2/
17
, property for.
7. Rules of Ethics: 1. Loyalty to the client
2.Confidentiality
3.Accurate accounting and reporting
4.Protection of owner's funds
5.Conflicts of interest
6.Compliance with Laws and Regulations
8.Management Agreement: 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. It will assist the
owner in meeting their goals and objectives as well as maximizing the
property's value and return.
9.Grounds for Termination of Management Agreement: 1. Sale or transfer
of the property
2.Improper financial reporting
3.Improper financial reporting
4.Negligence
5.Commingling funds
10.Comparison Analysis: 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
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