Property Management & Investment Analysis Final Exam With A+ Graded Solutions.

Property Management & Investment Analysis Final
Exam With A+ Graded Solutions.

1. A property manager’s primary obligation is to:
 A) Keep the tenants happy at all costs

 B) Achieve the highest possible net return for the owner

 C) Minimize all maintenance expenses to zero

 D) Ensure the property is 100% occupied at all times
CORRECT ANSWER: B) Achieve the highest possible net return for the
owner

2. Which of the following is considered a "Fixed Expense" in a property
management budget?
 A) Property taxes

 B) Roof repair

 C) Emergency plumbing

 D) Advertising costs
CORRECT ANSWER: A) Property taxes

3. A "Gross Lease" is most commonly used in which type of property?
 A) Industrial warehouses

 B) Residential apartments

 C) Large retail malls

 D) Commercial office buildings
CORRECT ANSWER: B) Residential apartments

4. The "Break-even Point" in a professional management report is the point
where:
 A) The owner makes a profit

 B) Gross income equals the total of all operating expenses and debt service

 C) The property is 50% occupied

 D) The mortgage is fully paid off
CORRECT ANSWER: B) Gross income equals the total of all operating
expenses and debt service

,5. In a "Triple Net Lease" (NNN), the tenant is responsible for paying:
 A) Only the base rent

 B) Rent, plus taxes, insurance, and maintenance

 C) Three times the normal security deposit

 D) Rent plus a percentage of their gross sales
CORRECT ANSWER: B) Rent, plus taxes, insurance, and maintenance

6. "Preventive Maintenance" is designed to:
 A) Fix items after they break

 B) Identify and correct problems before they become major repairs

 C) Replace all appliances every two years

 D) Reduce the owner's property tax liability
CORRECT ANSWER: B) Identify and correct problems before they
become major repairs

7. If a property has a Potential Gross Income of $100,000 and a 5% vacancy
rate, the Effective Gross Income is:
 A) $105,000

 B) $95,000

 C) $100,000

 D) $90,000
CORRECT ANSWER: B) $95,000

8. A "Step-up Lease" (Graduated Lease) features:
 A) Rent that decreases over time

 B) Rent increases at predetermined intervals

 C) Rent based on the tenant's number of employees

 D) No rent for the first year of the term
CORRECT ANSWER: B) Rent increases at predetermined intervals

9. "Cash on Cash Return" is calculated by dividing:
 A) Total value by the mortgage amount

 B) Annual before-tax cash flow by the total amount of cash invested

,  C) Net income by the cap rate

 D) Rent by the number of units
CORRECT ANSWER: B) Annual before-tax cash flow by the total amount
of cash invested

10. Under the Americans with Disabilities Act (ADA), which of the following is
considered a "Public Accommodation"?
 A) A private residence

 B) A real estate brokerage office

 C) A tenant's private bedroom

 D) A private social club
CORRECT ANSWER: B) A real estate brokerage office

11. "Negative Leverage" occurs when:
 A) The interest rate on the loan is higher than the cap rate of the property

 B) The property loses value over time

 C) The tenant fails to pay rent

 D) The owner sells for a loss
CORRECT ANSWER: A) The interest rate on the loan is higher than the
cap rate of the property

12. A "Percentage Lease" is most common in:
 A) Single-family home rentals

 B) Retail stores in shopping malls

 C) Medical office buildings

 D) Agricultural land leases
CORRECT ANSWER: B) Retail stores in shopping malls

13. Which of the following is an example of "Corrective Maintenance"?
 A) Changing air filters every six months

 B) Repairing a leaking water heater

 C) Painting a hallway before it fades

 D) Checking the fire alarm batteries
CORRECT ANSWER: B) Repairing a leaking water heater