REE 4103 FINAL EXAM AND ANSWERS
If a renewable lease option were found to be favorable to a tenant an appraiser: -
Answer -can assume the tenant would exercise the option to renew
Stabilized Net Operating Income should recognize the tenant improvements made to a
property that are appropriate for the market. - Answer -true
In determining income and expenses the first step is: - Answer -Lease and rent
analysis
A lease clause that limits the expenses of the landlord is termed a: (select all the
answers that are correct) - Answer -expense stop clause and expense cap
The anticipated income that remains after deducting all operating expenses from
effective gross income but before mortgage debt service is: - Answer -net operating
income
A rent survey reveals that apartment buildings offering one-bedroom units have a
considerably higher occupancy factor than those with two- bedroom units. If the subject
property includes only units with two bedrooms, the appraisal should probably project: -
Answer -A higher vacancy factor than found in the one-bedroom units
All of the following relate to the rent level or payment schedule of a lease except: -
Answer -sandwich or sublease
General payroll expenses: - Answer -include payments to all employees whose
services are essential to the property operation and management
Consider a property with potential gross income of $113,648, effective gross income of
$72,515, and operating expenses of $25,909. What is the net operating income? -
Answer -46606
Which of the following is an example of a specific expense item rather than a category?
- Answer -property taxes
A lease with the following annual payments: Year 1: $10,000 Year 2: $12,000 Year 3:
$14,000 Year 4: $16,000; would be called what type of lease? - Answer -step-up lease
In an appraisal of income property, which of the following items should be excluded
from the expense statement? - Answer -mortgage loan interest payments
In income capitalization, value is measured as the present worth of the: - Answer -
Forecast NOI plus the reversion
, Full recovery of amount invested is the: - Answer -Return of investment
Value is said to be the present worth of future benefits. This defines the principle of: -
Answer -anticipation
In a high rise 100-unit apartment building there is a basement laundry area that brings
in $100 monthly from the concessionaire. The laundry income is: - Answer -Would
commonly be included as a miscellaneous income and added to the potential gross
income.
Generally, higher overall cap rates are associated with: - Answer -less desirable
properties
When estimating the market value of an income-producing property, the appraiser will
not consider: - Answer -Income taxes attributable to the property
If a tenants sales do not reach a certain level, they may cancel their lease if they have
what type of clause? - Answer -kick-out clause
All the following are excluded from the reconstructed operating statement except: -
Answer -reserves for replacements
Effective gross income is income after an allowance for: - Answer -vacancy and
collection
All of the following lease provisions are advantageous to the lessee except - Answer -
an escalation clause
Lease renewals or extensions negotiated with existing tenants: - Answer -should be
used with caution
The definition of market value assumes financing terms: - Answer -compatible with
those found in the market
Any required adjustments in the division of expenses in comparable properties should: -
Answer -Reflect the same lease terms and division of expenses as the subject property
Rental data would not include: - Answer -reproduction cost
A revaluation lease - Answer -Provides for increases in the rental rates based on
revaluation of the property value or rental rate by an appraiser
In fee simple valuations, all rentable space is estimated at what levels? - Answer -
market rent levels
If a renewable lease option were found to be favorable to a tenant an appraiser: -
Answer -can assume the tenant would exercise the option to renew
Stabilized Net Operating Income should recognize the tenant improvements made to a
property that are appropriate for the market. - Answer -true
In determining income and expenses the first step is: - Answer -Lease and rent
analysis
A lease clause that limits the expenses of the landlord is termed a: (select all the
answers that are correct) - Answer -expense stop clause and expense cap
The anticipated income that remains after deducting all operating expenses from
effective gross income but before mortgage debt service is: - Answer -net operating
income
A rent survey reveals that apartment buildings offering one-bedroom units have a
considerably higher occupancy factor than those with two- bedroom units. If the subject
property includes only units with two bedrooms, the appraisal should probably project: -
Answer -A higher vacancy factor than found in the one-bedroom units
All of the following relate to the rent level or payment schedule of a lease except: -
Answer -sandwich or sublease
General payroll expenses: - Answer -include payments to all employees whose
services are essential to the property operation and management
Consider a property with potential gross income of $113,648, effective gross income of
$72,515, and operating expenses of $25,909. What is the net operating income? -
Answer -46606
Which of the following is an example of a specific expense item rather than a category?
- Answer -property taxes
A lease with the following annual payments: Year 1: $10,000 Year 2: $12,000 Year 3:
$14,000 Year 4: $16,000; would be called what type of lease? - Answer -step-up lease
In an appraisal of income property, which of the following items should be excluded
from the expense statement? - Answer -mortgage loan interest payments
In income capitalization, value is measured as the present worth of the: - Answer -
Forecast NOI plus the reversion
, Full recovery of amount invested is the: - Answer -Return of investment
Value is said to be the present worth of future benefits. This defines the principle of: -
Answer -anticipation
In a high rise 100-unit apartment building there is a basement laundry area that brings
in $100 monthly from the concessionaire. The laundry income is: - Answer -Would
commonly be included as a miscellaneous income and added to the potential gross
income.
Generally, higher overall cap rates are associated with: - Answer -less desirable
properties
When estimating the market value of an income-producing property, the appraiser will
not consider: - Answer -Income taxes attributable to the property
If a tenants sales do not reach a certain level, they may cancel their lease if they have
what type of clause? - Answer -kick-out clause
All the following are excluded from the reconstructed operating statement except: -
Answer -reserves for replacements
Effective gross income is income after an allowance for: - Answer -vacancy and
collection
All of the following lease provisions are advantageous to the lessee except - Answer -
an escalation clause
Lease renewals or extensions negotiated with existing tenants: - Answer -should be
used with caution
The definition of market value assumes financing terms: - Answer -compatible with
those found in the market
Any required adjustments in the division of expenses in comparable properties should: -
Answer -Reflect the same lease terms and division of expenses as the subject property
Rental data would not include: - Answer -reproduction cost
A revaluation lease - Answer -Provides for increases in the rental rates based on
revaluation of the property value or rental rate by an appraiser
In fee simple valuations, all rentable space is estimated at what levels? - Answer -
market rent levels
