1
DC PROPERTY MANAGEMENT LICENSE
REAL Exam Questions and Verified Answers
100% Correct Top-Rated A+ Latest
“The primary responsibility of a real estate property manager is to
correct answer>> understand and implement the owner's goals and
objectives"
"Type of building alternatives correct answer>> • 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 answer>> Physical
Obsolescence, Functional Obsolescence, and Economic
Obsolescence"
"Physical Obsolescence correct answer>> 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."
"Assessed Value correct answer>> This is the value used by
government tax assessment offices. Since it is frequently determined
using sophisticated mathematical models that are applied to many
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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"."
"Market Value correct answer>> This is the value that is agreed to
between a buyer and seller. It represents the "meeting of the minds"."
"Budget Process correct answer>> generally occurs on an annual
basis and involves preparing a detailed list of all anticipated income
and expenses (both operating and capital)."
"What is the purpose of a Budget? correct answer>> The purpose of
the Budget is to develop a means to both track the prope1ty's
perfonnance and to organize the various types of income (such as
rent, miscellaneous income, etc.) and expenses (such as utilities,
insurance, payroll, etc.) in a meaningful way."
"Gross Potential Rental Income correct answer>> is the maximum
amount of income that a property can generate from all sources."
"Pass-Through Income, Expense Reimbursements or Recoveries.
correct answer>> In certain types of leases, paiticularly commercial
leases, tenants can also be billed for some or all of the property's
operating expenses, real estate taxes and insurance."
"Vacancy and Credit Loss correct answer>> vacant spaces do not
produce any income and sometimes residents/tenants do not pay for
all of their lease obligations, actual income can be less than the Gross
Potential Rental Income. This difference is refen-ed to as Vacancy and
Credit Loss and it is subtracted from Gross Potential Rental Income."
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"Cost per square foot ($/SF) basis correct answer>> commercial
properties operating expense are calculated on Cost per square foot
($/SF) basis. By using a "unit cost" basis, it is easier to compare the
expenses of one property to other similar prope1ties even though the
total areas may vary."
"If a commercial prope11y is 100,000 SF and its annual electricity
costs are $225,000, what is the electricity cost per square foot?
correct answer>> $225,000/100,000 = $2.25/SF"
"Building A is 75,000 sf. Its Operating Expenses are $180,000 for
electricity, $30,000 for repairs & maintenance and $150,000 for real
estate taxes.
Building B is 200,000 sf. Its Operating Expenses are $400,000 for
electricity, $55,000 for repairs & maintenance and $400,000 for real
estate taxes.
Which building has lower Operating Expenses per square foot?
correct answer>> Building B"
"Net Operating Income (NOI) correct answer>> It represents the
money that remains after Operating Expenses are subtracted from
Effective Gross Income. A property that produces a positive Net
Operating Income indicates that Effective Gross Income exceeds its
Operating Expenses"
"Debt Service correct answer>> includes both the interest and
principal reduction and is subtracted from Net Operating Income. An
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owner will want to know if the property is producing sufficient NOi
to pay the Debt Service."
"Cash Flow correct answer>> is the amount of money that remains
after Debt Service is subtracted from Net Operating Income."
"Return on Investment correct answer>> Annual Cash Flow/Initial
Cash Investment= Return on Investment"
"An investor is considering the purchase of a hotel prope1ty for
$5,000,000 that will be paid with a $1,000,000 down payment and a
$4,000,000 11101tgage. The annual Cash Flow is projected to be
$90,000. What is the investor projected Return on Investment?
correct answer>> Annual Cash Flow/Initial Cash Investment =
Retum on Investment
$90,000 I $1,000,000 = 9%"
"Lease correct answer>> a written contract between
owner/landlord (Lessor) and tenant/resident (Lessee) for the use of
real property and outlines each paity'slights and responsibilities"
"A lease's fundamental components include: correct answer>> •
Parties to the lease
• Description of the prope1ty and the premises being rented
• Term of the lease
• Secmity deposit amount
4
DC PROPERTY MANAGEMENT LICENSE
REAL Exam Questions and Verified Answers
100% Correct Top-Rated A+ Latest
“The primary responsibility of a real estate property manager is to
correct answer>> understand and implement the owner's goals and
objectives"
"Type of building alternatives correct answer>> • 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 answer>> Physical
Obsolescence, Functional Obsolescence, and Economic
Obsolescence"
"Physical Obsolescence correct answer>> 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."
"Assessed Value correct answer>> This is the value used by
government tax assessment offices. Since it is frequently determined
using sophisticated mathematical models that are applied to many
1
,2
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"."
"Market Value correct answer>> This is the value that is agreed to
between a buyer and seller. It represents the "meeting of the minds"."
"Budget Process correct answer>> generally occurs on an annual
basis and involves preparing a detailed list of all anticipated income
and expenses (both operating and capital)."
"What is the purpose of a Budget? correct answer>> The purpose of
the Budget is to develop a means to both track the prope1ty's
perfonnance and to organize the various types of income (such as
rent, miscellaneous income, etc.) and expenses (such as utilities,
insurance, payroll, etc.) in a meaningful way."
"Gross Potential Rental Income correct answer>> is the maximum
amount of income that a property can generate from all sources."
"Pass-Through Income, Expense Reimbursements or Recoveries.
correct answer>> In certain types of leases, paiticularly commercial
leases, tenants can also be billed for some or all of the property's
operating expenses, real estate taxes and insurance."
"Vacancy and Credit Loss correct answer>> vacant spaces do not
produce any income and sometimes residents/tenants do not pay for
all of their lease obligations, actual income can be less than the Gross
Potential Rental Income. This difference is refen-ed to as Vacancy and
Credit Loss and it is subtracted from Gross Potential Rental Income."
2
,3
"Cost per square foot ($/SF) basis correct answer>> commercial
properties operating expense are calculated on Cost per square foot
($/SF) basis. By using a "unit cost" basis, it is easier to compare the
expenses of one property to other similar prope1ties even though the
total areas may vary."
"If a commercial prope11y is 100,000 SF and its annual electricity
costs are $225,000, what is the electricity cost per square foot?
correct answer>> $225,000/100,000 = $2.25/SF"
"Building A is 75,000 sf. Its Operating Expenses are $180,000 for
electricity, $30,000 for repairs & maintenance and $150,000 for real
estate taxes.
Building B is 200,000 sf. Its Operating Expenses are $400,000 for
electricity, $55,000 for repairs & maintenance and $400,000 for real
estate taxes.
Which building has lower Operating Expenses per square foot?
correct answer>> Building B"
"Net Operating Income (NOI) correct answer>> It represents the
money that remains after Operating Expenses are subtracted from
Effective Gross Income. A property that produces a positive Net
Operating Income indicates that Effective Gross Income exceeds its
Operating Expenses"
"Debt Service correct answer>> includes both the interest and
principal reduction and is subtracted from Net Operating Income. An
3
, 4
owner will want to know if the property is producing sufficient NOi
to pay the Debt Service."
"Cash Flow correct answer>> is the amount of money that remains
after Debt Service is subtracted from Net Operating Income."
"Return on Investment correct answer>> Annual Cash Flow/Initial
Cash Investment= Return on Investment"
"An investor is considering the purchase of a hotel prope1ty for
$5,000,000 that will be paid with a $1,000,000 down payment and a
$4,000,000 11101tgage. The annual Cash Flow is projected to be
$90,000. What is the investor projected Return on Investment?
correct answer>> Annual Cash Flow/Initial Cash Investment =
Retum on Investment
$90,000 I $1,000,000 = 9%"
"Lease correct answer>> a written contract between
owner/landlord (Lessor) and tenant/resident (Lessee) for the use of
real property and outlines each paity'slights and responsibilities"
"A lease's fundamental components include: correct answer>> •
Parties to the lease
• Description of the prope1ty and the premises being rented
• Term of the lease
• Secmity deposit amount
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