DC Property Management Exam Study Guide with Complete Solutions Management Plan - Correct Answer 1. Current use
- Current condition
- Fiscal projections
- Operational issues
- Demographic conditions
- Geographic features
- Governmental perspective
- Existing real estate supply
- Future developments
- Tenant demand
Market Analysis - Correct Answer Regional and neighborhood evaluation focusing on:
Analysis of Alternatives - Correct Answer Theoretical costs and potential for rent increase based on
decision to:
- Modernize
- Rehabilitate
- Change
- Convert
- Functional Obsolescence is characterized by old or outdated designs or building systems.
- Economic Obsolescence represents a loss in value due to outside forces (i.e. location, market
Capital Expenditures - Correct Answer Projects that help extend a properties useful life.Three Types of Obsolescence - Correct Answer 1. Physical Obsolescence is characterized as a condition of aging (i.e. wear and tear) or deferred maintenance.
conditions).Five Types of Property Values - Correct Answer 1. Investment Value - 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. 1 / 2
- Assessed Value - This is the value used by government tax assessment offices. Since it is frequently
- Market Value - This is the value that is agreed to between a buyer and seller. It represents the
- Depreciated Value - This is used for income tax purposes and affects a property's tax basis. In the
- List price - This is only the price that the owner has offered to sell a property for.
- Confidentiality
- Accurate accounting and reporting
- Protection of owner's funds
- Conflicts of interest
- Compliance with Laws and Regulations
- Improper financial reporting
- Improper financial reporting
- Negligence
- Commingling funds
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determined using sophisticated mathematical models that are applied to many similar types of properties over a geographic area, it can be less accurate and produce results that are higher or lower than other types of "values".
"meeting of the minds".
past, the Federal Government has implemented accelerated depreciation programs to help promote economic growth.
Rules of Ethics - Correct Answer 1. Loyalty to the client
Management Agreement - Correct Answer A formal and binding contract that establishes the authority and responsibilities that the manager has on behalf of the owner and in operating the property. It will assist the owner in meeting their goals and objectives as well as maximizing the property's value and return.Grounds for Termination of Management Agreement - Correct Answer 1. Sale or transfer of the property
Comparison Analysis - Correct Answer The purpose of this analysis is to not only identify physical differences as well as strengths and weaknesses, but also to determine a value for each element and to make adjustments to the subject property's rental rate, up or down, based on the results.Budget Process - Correct Answer Occurs annually; purpose being to develop a means to both track the property's performance and to organize the various types of income and expenses.