Michigan Property Management Specialist
Exam Practice Questions And Correct
Answers (Verified Answers) Plus Rationale
2026 Q&A| Instant Download Pdf
1. A property manager’s primary fiduciary duty to the owner is to
A. Maximize tenant occupancy regardless of rent level.
B. Preserve and increase the owner’s investment.
C. Provide maintenance at the lowest possible cost.
D. Ensure tenants never vacate.
The primary fiduciary duty of a property manager is to protect and
enhance the owner’s investment by balancing revenue and expenses.
2. Which financial statement shows the property’s revenues and
expenses over a period of time?
A. Balance sheet
B. Income statement
C. Cash flow statement
D. Statement of owner’s equity
An income statement reports the revenues and expenses for a
specific period, demonstrating profitability.
3. A market analysis for setting rental rates should include examination
of
A. The owner’s subjective preferences only.
B. Historical rents from unrelated markets.
C. Comparable properties’ rents and amenities.
D. Future speculative demand regardless of current data.
Comparing similar properties’ rents and features provides relevant
data for competitive pricing.
,4. A lease that automatically renews for successive periods unless
terminated is called
A. Tenancy at will.
B. Periodic tenancy.
C. Tenancy for years.
D. Gross lease.
A periodic tenancy continues for equal intervals until proper notice is
given.
5. Which of the following is an operating expense?
A. Mortgage principal
B. Mortgage interest
C. Property insurance
D. Capital improvements
Operating expenses are recurring costs required to operate and
maintain the property, such as insurance.
6. The Americans with Disabilities Act (ADA) requires property managers
to
A. Provide free housing for disabled tenants.
B. Ensure reasonable accessibility for disabled individuals.
C. Reduce rent for those with disabilities.
D. Renovate all spaces regardless of cost.
ADA mandates accessibility modifications to public and certain
common areas to accommodate disabled persons.
7. In property management, cost control refers to
A. Maximizing expenditure to improve property image.
B. Keeping operating expenses within budget.
C. Ignoring long-term maintenance.
D. Reducing tenant services to zero.
Cost control means managing expenses effectively to support
financial goals.
8. A property manager should maintain security deposits in
A. The owner’s personal account.
B. Cash on hand.
C. A separate trust or escrow account.
D. An account mixing operating funds.
, Security deposits must be held separately to avoid commingling with
operating funds.
9. A tenant improvement allowance is
A. A fine charged to tenants for damages.
B. A tax rebate from the municipality.
C. Funds given to a tenant to customize leased space.
D. A rent discount for late payment.
An improvement allowance is a negotiated amount the owner gives
for tenant’s build-out costs.
10. Net operating income (NOI) is calculated by subtracting
A. Gross income from debt service.
B. Capital expenditures from rent.
C. Operating expenses from effective gross income.
D. Vacancy losses from owner’s profit.
NOI equals effective gross income minus operating expenses before
debt and taxes.
11. A common method of estimating property value used by
property managers is
A. Cost approach only.
B. Income capitalization approach.
C. Physical deterioration method.
D. Replacement ratio.
Income capitalization values income-producing properties based on
expected returns.
12. The Fair Housing Act prohibits discrimination based on
A. Income level.
B. Credit score.
C. Race and familial status.
D. Pet ownership.
Fair Housing prohibits discrimination against protected classes like
race and family status.
13. A preventative maintenance program is designed to
A. Repair only after failure.
B. Eliminate all maintenance costs.
C. Prevent breakdowns and prolong equipment life.
Exam Practice Questions And Correct
Answers (Verified Answers) Plus Rationale
2026 Q&A| Instant Download Pdf
1. A property manager’s primary fiduciary duty to the owner is to
A. Maximize tenant occupancy regardless of rent level.
B. Preserve and increase the owner’s investment.
C. Provide maintenance at the lowest possible cost.
D. Ensure tenants never vacate.
The primary fiduciary duty of a property manager is to protect and
enhance the owner’s investment by balancing revenue and expenses.
2. Which financial statement shows the property’s revenues and
expenses over a period of time?
A. Balance sheet
B. Income statement
C. Cash flow statement
D. Statement of owner’s equity
An income statement reports the revenues and expenses for a
specific period, demonstrating profitability.
3. A market analysis for setting rental rates should include examination
of
A. The owner’s subjective preferences only.
B. Historical rents from unrelated markets.
C. Comparable properties’ rents and amenities.
D. Future speculative demand regardless of current data.
Comparing similar properties’ rents and features provides relevant
data for competitive pricing.
,4. A lease that automatically renews for successive periods unless
terminated is called
A. Tenancy at will.
B. Periodic tenancy.
C. Tenancy for years.
D. Gross lease.
A periodic tenancy continues for equal intervals until proper notice is
given.
5. Which of the following is an operating expense?
A. Mortgage principal
B. Mortgage interest
C. Property insurance
D. Capital improvements
Operating expenses are recurring costs required to operate and
maintain the property, such as insurance.
6. The Americans with Disabilities Act (ADA) requires property managers
to
A. Provide free housing for disabled tenants.
B. Ensure reasonable accessibility for disabled individuals.
C. Reduce rent for those with disabilities.
D. Renovate all spaces regardless of cost.
ADA mandates accessibility modifications to public and certain
common areas to accommodate disabled persons.
7. In property management, cost control refers to
A. Maximizing expenditure to improve property image.
B. Keeping operating expenses within budget.
C. Ignoring long-term maintenance.
D. Reducing tenant services to zero.
Cost control means managing expenses effectively to support
financial goals.
8. A property manager should maintain security deposits in
A. The owner’s personal account.
B. Cash on hand.
C. A separate trust or escrow account.
D. An account mixing operating funds.
, Security deposits must be held separately to avoid commingling with
operating funds.
9. A tenant improvement allowance is
A. A fine charged to tenants for damages.
B. A tax rebate from the municipality.
C. Funds given to a tenant to customize leased space.
D. A rent discount for late payment.
An improvement allowance is a negotiated amount the owner gives
for tenant’s build-out costs.
10. Net operating income (NOI) is calculated by subtracting
A. Gross income from debt service.
B. Capital expenditures from rent.
C. Operating expenses from effective gross income.
D. Vacancy losses from owner’s profit.
NOI equals effective gross income minus operating expenses before
debt and taxes.
11. A common method of estimating property value used by
property managers is
A. Cost approach only.
B. Income capitalization approach.
C. Physical deterioration method.
D. Replacement ratio.
Income capitalization values income-producing properties based on
expected returns.
12. The Fair Housing Act prohibits discrimination based on
A. Income level.
B. Credit score.
C. Race and familial status.
D. Pet ownership.
Fair Housing prohibits discrimination against protected classes like
race and family status.
13. A preventative maintenance program is designed to
A. Repair only after failure.
B. Eliminate all maintenance costs.
C. Prevent breakdowns and prolong equipment life.
