DC Property Management License Latest recent & frequently
tested exam with questions and verified accurate solutions
(detailed & elaborated) GRADED A+
,The primary responsibility of a real estate property manager is to - correct ans:understand and
implement the owner's goals and objectives
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? -
correct ans:Gross Potential Rental Income per month calculation ($800 x 20) + ($1500 x 30) =$61,000
per month
Management Plan - correct ans: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.
Market Analysis - correct ans: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
Competitive Property Analysis - correct ans:identifes the subject property's strengths and weaknesses
Analysis of Alternatives - correct ans:theoretical costs and coresponding increase in rents by making
different improvements, even the subject property's redevelopment.
Type of building alternatives - correct ans:• Rehabilitate the property without altering its existing use
• Modernize the property by updating finishes, purchasing new or more efficient 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 office), or by demolishing it for a completely new development.
• Conversion to a condominium ownership structure
Three types of obsolescence - correct ans:Physical Obsolescence, Functional Obsolescence, and
Economic Obsolescence
Physical Obsolescence - correct ans:is 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, Functional Obsolescence - correct ans:is characterized by old or outdated designs or building systems.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.
Economic Obsolescence - correct ans: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 ans:loss in value from the various forms of obsolescence. Depreciation can be
economically estimated on a broad level.
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? - correct ans:$12,000,000 - $1,500,000 = $10,500,000 Depreciated
Value after 5 years
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? - correct ans:$12,000,000 x 0.025 = $300,000 per year of Depreciated
Value
If a new 400 unit apa1tment building is worth $12,000,000 and depreciates in value at 2.5% per year,
what is its
Accumulated Depreciated Value after 1 year? - correct ans:$300,000 x 5 years= $1,500,000 accumulated
Depreciation
What are the different types of property values? - correct ans:Investment Value, Assessed Value, Market
Value, Depreciated Value
Investment Value - correct ans: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.
tested exam with questions and verified accurate solutions
(detailed & elaborated) GRADED A+
,The primary responsibility of a real estate property manager is to - correct ans:understand and
implement the owner's goals and objectives
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? -
correct ans:Gross Potential Rental Income per month calculation ($800 x 20) + ($1500 x 30) =$61,000
per month
Management Plan - correct ans: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.
Market Analysis - correct ans: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
Competitive Property Analysis - correct ans:identifes the subject property's strengths and weaknesses
Analysis of Alternatives - correct ans:theoretical costs and coresponding increase in rents by making
different improvements, even the subject property's redevelopment.
Type of building alternatives - correct ans:• Rehabilitate the property without altering its existing use
• Modernize the property by updating finishes, purchasing new or more efficient 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 office), or by demolishing it for a completely new development.
• Conversion to a condominium ownership structure
Three types of obsolescence - correct ans:Physical Obsolescence, Functional Obsolescence, and
Economic Obsolescence
Physical Obsolescence - correct ans:is 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 ans: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.
Economic Obsolescence - correct ans: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 ans:loss in value from the various forms of obsolescence. Depreciation can be
economically estimated on a broad level.
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? - correct ans:$12,000,000 - $1,500,000 = $10,500,000 Depreciated
Value after 5 years
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? - correct ans:$12,000,000 x 0.025 = $300,000 per year of Depreciated
Value
If a new 400 unit apa1tment building is worth $12,000,000 and depreciates in value at 2.5% per year,
what is its
Accumulated Depreciated Value after 1 year? - correct ans:$300,000 x 5 years= $1,500,000 accumulated
Depreciation
What are the different types of property values? - correct ans:Investment Value, Assessed Value, Market
Value, Depreciated Value
Investment Value - correct ans: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.
