PSI NJ REAL ESTATE EXAM AND PRACTICE EXAM
NEWEST 2026/ 2027 TEST BANK| NEW JERSEY PSI
REAL ESTATE STATE EXAM PREP WITH COMPLETE
550 REAL EXAM QUESTIONS AND CORRECT
VERIFIED ANSWERS/ GRADED A+ (MOST RECENT!!)
The longest a new home builder must warranty some parts of the
construction against defects is
A) one year
B) two year
C) five years
D) ten years - Correct Answer – D) ten years
In New Jersey, subdivision regulations may apply as soon as anyone
splits off the
A) first lot
B) second lot
C) third lot
D) fourth lot - Correct Answer – B) second lot
A builder found a buyer for the new ranch home he has just finished, but
the buyers need occupancy right away, before their mortgage loan comes
through. Before letting the buyers move in, the builder must maintain.
A) subdivider's registration
B) a certificate of occupancy
C) a construction permit
pg. 1
,D) a UCC filing - Correct Answer – B) a certificate of occupancy
In New Jersey, which projects are obligated to provide an environmental
impact statement
A) Federal projects
B) State projects
C) Any developer of more than 10 acres
D) Municipal projects - Correct Answer – A) federal projects
A property's equity represents its current value less which of the
following?
A) depreciation
B) mortgage indebtedness
C) physical improvements
D) selling costs and depreciation - Correct Answer – B) mortgage
indebtedness
The primary source of tax shelter in real estate investments comes from
the accounting concept known as
A) recapture
B) boot
C) depreciation
D) net operating income - Correct Answer – C) depreciation
pg. 2
,For tax purposes the initial cost of an investment property plus the cost
of any subsequent improvements to the property, less depreciation,
represents the investment's
A) adjusted basis
B) capital gains
C) basis
D) salvage value - Correct Answer – A) adjusted basis
The investor who secures the IRS regards as excessive tax shelter may
be subject to
A) recovery
B) recapture
C) alternative minimum tax
D) pyramiding - Correct Answer – C) alternative minimum tax
An investment syndicate in which all members share equally in the
managerial decisions, profits, and losses involved in the venture is an
example of which of the following?
A) real estate investment trust
B) limited partnership
C) real estate mortgage trust
D) general partnership - Correct Answer – D) general partnership
An apartment building has $65k in potential gross annual income. The
vacancy rate is estimated at 5%. Total operating expenses are $29k. The
capitalization rate is 9%. What would be the value of the building using
the income approach?
pg. 3
, A) $324,773
B) $363,889
C) $372,895
D) $392,367 - Correct Answer – B) $363,889
An appraiser has been asked to appraise a two-unit apartment building.
In this neighborhood, the accepted gross rent multiplier is 144. The
annual income on the building is $16,800 (both units rented). The
monthly expenses are $300. What is the estimated market value if it is
based on the income approach?
A) $201,600
B) $232,500
C) $224,800
D) $258,600 - Correct Answer – A) $201,600
A small multifamily property generates $50k in rental income with
expenses of $45k annually, including $35k in debt service. The property
appreciates about $25k a year. The owner realizes another $5k through
income tax savings. On this property, the cash flow is
A) $5k
B) $15k
C) $25k
D) $35k - Correct Answer – A) $5k
A small multifamily property generates $50k in rental income with
expenses of $45k annually, including $35k in debt service. The property
pg. 4
NEWEST 2026/ 2027 TEST BANK| NEW JERSEY PSI
REAL ESTATE STATE EXAM PREP WITH COMPLETE
550 REAL EXAM QUESTIONS AND CORRECT
VERIFIED ANSWERS/ GRADED A+ (MOST RECENT!!)
The longest a new home builder must warranty some parts of the
construction against defects is
A) one year
B) two year
C) five years
D) ten years - Correct Answer – D) ten years
In New Jersey, subdivision regulations may apply as soon as anyone
splits off the
A) first lot
B) second lot
C) third lot
D) fourth lot - Correct Answer – B) second lot
A builder found a buyer for the new ranch home he has just finished, but
the buyers need occupancy right away, before their mortgage loan comes
through. Before letting the buyers move in, the builder must maintain.
A) subdivider's registration
B) a certificate of occupancy
C) a construction permit
pg. 1
,D) a UCC filing - Correct Answer – B) a certificate of occupancy
In New Jersey, which projects are obligated to provide an environmental
impact statement
A) Federal projects
B) State projects
C) Any developer of more than 10 acres
D) Municipal projects - Correct Answer – A) federal projects
A property's equity represents its current value less which of the
following?
A) depreciation
B) mortgage indebtedness
C) physical improvements
D) selling costs and depreciation - Correct Answer – B) mortgage
indebtedness
The primary source of tax shelter in real estate investments comes from
the accounting concept known as
A) recapture
B) boot
C) depreciation
D) net operating income - Correct Answer – C) depreciation
pg. 2
,For tax purposes the initial cost of an investment property plus the cost
of any subsequent improvements to the property, less depreciation,
represents the investment's
A) adjusted basis
B) capital gains
C) basis
D) salvage value - Correct Answer – A) adjusted basis
The investor who secures the IRS regards as excessive tax shelter may
be subject to
A) recovery
B) recapture
C) alternative minimum tax
D) pyramiding - Correct Answer – C) alternative minimum tax
An investment syndicate in which all members share equally in the
managerial decisions, profits, and losses involved in the venture is an
example of which of the following?
A) real estate investment trust
B) limited partnership
C) real estate mortgage trust
D) general partnership - Correct Answer – D) general partnership
An apartment building has $65k in potential gross annual income. The
vacancy rate is estimated at 5%. Total operating expenses are $29k. The
capitalization rate is 9%. What would be the value of the building using
the income approach?
pg. 3
, A) $324,773
B) $363,889
C) $372,895
D) $392,367 - Correct Answer – B) $363,889
An appraiser has been asked to appraise a two-unit apartment building.
In this neighborhood, the accepted gross rent multiplier is 144. The
annual income on the building is $16,800 (both units rented). The
monthly expenses are $300. What is the estimated market value if it is
based on the income approach?
A) $201,600
B) $232,500
C) $224,800
D) $258,600 - Correct Answer – A) $201,600
A small multifamily property generates $50k in rental income with
expenses of $45k annually, including $35k in debt service. The property
appreciates about $25k a year. The owner realizes another $5k through
income tax savings. On this property, the cash flow is
A) $5k
B) $15k
C) $25k
D) $35k - Correct Answer – A) $5k
A small multifamily property generates $50k in rental income with
expenses of $45k annually, including $35k in debt service. The property
pg. 4
