PROPERTY MANAGEMENT FINAL EXAM QUESTION AND
CORRECT ANSWER WITH EXPLANATION LATEST 2025-
2026
1.
Property management primarily involves:
A. Operating and maintaining real estate for owners
B. Selling property only
C. Appraising land only
D. Financing mortgages
Answer: A
Rationale: Property managers handle daily operations of real estate.
2.
A property manager acts as:
A. Agent of the owner
B. Buyer representative
C. Tenant only
D. Lender
Answer: A
Rationale: Represents owner’s interests.
3.
The property management agreement is between:
A. Owner and property manager
B. Buyer and seller
C. Tenant and lender
D. Government and broker
Answer: A
Rationale: Establishes management authority.
4.
,The main goal of property management is to:
A. Maximize owner’s return
B. Reduce property value
C. Eliminate tenants
D. Avoid maintenance
Answer: A
Rationale: Increase income and preserve value.
5.
Gross rental income is:
A. Total rent collected before expenses
B. Net profit
C. Loan amount
D. Tax amount
Answer: A
Rationale: Total potential income.
6.
Effective gross income (EGI) is:
A. Gross income minus vacancy losses
B. Net income after taxes
C. Loan income
D. Insurance income
Answer: A
Rationale: Real collectible income.
7.
Vacancy loss refers to:
A. Income lost from unoccupied units
B. Property damage
C. Tax increase
D. Insurance cost
Answer: A
Rationale: Units not generating rent.
, 8.
Operating expenses include:
A. Maintenance and utilities
B. Loan principal
C. Property sale price
D. Appraisal fees
Answer: A
Rationale: Day-to-day costs.
9.
Net operating income (NOI) is:
A. Income minus operating expenses
B. Gross rent
C. Loan balance
D. Tax refund
Answer: A
Rationale: Core profitability measure.
10.
Debt service refers to:
A. Mortgage payment
B. Maintenance cost
C. Insurance premium
D. Rental income
Answer: A
Rationale: Loan repayment obligations.
11.
Cash flow is:
A. NOI minus debt service
B. Gross income
C. Tax payment
CORRECT ANSWER WITH EXPLANATION LATEST 2025-
2026
1.
Property management primarily involves:
A. Operating and maintaining real estate for owners
B. Selling property only
C. Appraising land only
D. Financing mortgages
Answer: A
Rationale: Property managers handle daily operations of real estate.
2.
A property manager acts as:
A. Agent of the owner
B. Buyer representative
C. Tenant only
D. Lender
Answer: A
Rationale: Represents owner’s interests.
3.
The property management agreement is between:
A. Owner and property manager
B. Buyer and seller
C. Tenant and lender
D. Government and broker
Answer: A
Rationale: Establishes management authority.
4.
,The main goal of property management is to:
A. Maximize owner’s return
B. Reduce property value
C. Eliminate tenants
D. Avoid maintenance
Answer: A
Rationale: Increase income and preserve value.
5.
Gross rental income is:
A. Total rent collected before expenses
B. Net profit
C. Loan amount
D. Tax amount
Answer: A
Rationale: Total potential income.
6.
Effective gross income (EGI) is:
A. Gross income minus vacancy losses
B. Net income after taxes
C. Loan income
D. Insurance income
Answer: A
Rationale: Real collectible income.
7.
Vacancy loss refers to:
A. Income lost from unoccupied units
B. Property damage
C. Tax increase
D. Insurance cost
Answer: A
Rationale: Units not generating rent.
, 8.
Operating expenses include:
A. Maintenance and utilities
B. Loan principal
C. Property sale price
D. Appraisal fees
Answer: A
Rationale: Day-to-day costs.
9.
Net operating income (NOI) is:
A. Income minus operating expenses
B. Gross rent
C. Loan balance
D. Tax refund
Answer: A
Rationale: Core profitability measure.
10.
Debt service refers to:
A. Mortgage payment
B. Maintenance cost
C. Insurance premium
D. Rental income
Answer: A
Rationale: Loan repayment obligations.
11.
Cash flow is:
A. NOI minus debt service
B. Gross income
C. Tax payment
