IAAO 102 COMPREHENSIVE STUDY
GUIDE 2026 FULL QUESTIONS AND
SOLUTIONS GRADED A+
◍ Four Factors when comparing rental properties.
Answer: Date of LeaseLocation of PropertyPhysical Characteristics of
propertyTerms of lease
◍ Five units of comparison of rental properties.
Answer: Rent per unitRent per roomPent per spaceRent per SFGross Income
Multiplier
◍ Gross Leasable Area.
Answer: Total Leasable are, including common areas
◍ effective Gross Income(EGI).
Answer: The Potential Gross Income(PGI) - Vacancy and collection loss +
appropriate miscellaneous income
◍ Miscellanoues income.
Answer: Income from vending machines and coin operated laundry
machines are examples
◍ Potential Gross Income(PGI).
Answer: First step in reconstructing the income and expense statement is
determining this
◍ Examples of proper expenses on an operating expense statement.
Answer: SalariesManagement Utilities
◍ Reserves for replacements.
Answer: Expense amounts for short-lived items such as carpet, drapes, and
water heaters
, ◍ Improper Expenses.
Answer: Depreciation, Debt Service, Income Taxes, Capital Improvements,
Owners Business Expenses, Real Estate Taxes
◍ Net Operating Income(NOI).
Answer: The income after developing effective gross income and allowing
for operating expenses and reserves for replacement
◍ Rent concessions.
Answer: take the form of either free rent or extra tenant improvement
allowances.
◍ Leased fee value.
Answer: tends to be less than the fee simple value because leases are
typically set at market level when written, but usually fall below market
levels as time passes
◍ Class B.
Answer: Building that are generally a little older but still have a good quality
management and tenants.
◍ Effective Rent.
Answer: Used as a common denominator to compare leases with different
provisions. The rent is the lease base rent - rent conssession.
◍ Operating Expense Ratio(OER) Formula.
Answer: Total Expenses/Effective Gross Income
◍ Value is created by the expectation of benefits to be derived in the future..
Answer: Anticipation
◍ The prices, rents, and rates of return of property tend to be set by the current
prices, rents, and rates of return for equally desirable substitute properties..
Answer: Substitution
◍ The most profitable price which a property should bring in a competitive
and open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
GUIDE 2026 FULL QUESTIONS AND
SOLUTIONS GRADED A+
◍ Four Factors when comparing rental properties.
Answer: Date of LeaseLocation of PropertyPhysical Characteristics of
propertyTerms of lease
◍ Five units of comparison of rental properties.
Answer: Rent per unitRent per roomPent per spaceRent per SFGross Income
Multiplier
◍ Gross Leasable Area.
Answer: Total Leasable are, including common areas
◍ effective Gross Income(EGI).
Answer: The Potential Gross Income(PGI) - Vacancy and collection loss +
appropriate miscellaneous income
◍ Miscellanoues income.
Answer: Income from vending machines and coin operated laundry
machines are examples
◍ Potential Gross Income(PGI).
Answer: First step in reconstructing the income and expense statement is
determining this
◍ Examples of proper expenses on an operating expense statement.
Answer: SalariesManagement Utilities
◍ Reserves for replacements.
Answer: Expense amounts for short-lived items such as carpet, drapes, and
water heaters
, ◍ Improper Expenses.
Answer: Depreciation, Debt Service, Income Taxes, Capital Improvements,
Owners Business Expenses, Real Estate Taxes
◍ Net Operating Income(NOI).
Answer: The income after developing effective gross income and allowing
for operating expenses and reserves for replacement
◍ Rent concessions.
Answer: take the form of either free rent or extra tenant improvement
allowances.
◍ Leased fee value.
Answer: tends to be less than the fee simple value because leases are
typically set at market level when written, but usually fall below market
levels as time passes
◍ Class B.
Answer: Building that are generally a little older but still have a good quality
management and tenants.
◍ Effective Rent.
Answer: Used as a common denominator to compare leases with different
provisions. The rent is the lease base rent - rent conssession.
◍ Operating Expense Ratio(OER) Formula.
Answer: Total Expenses/Effective Gross Income
◍ Value is created by the expectation of benefits to be derived in the future..
Answer: Anticipation
◍ The prices, rents, and rates of return of property tend to be set by the current
prices, rents, and rates of return for equally desirable substitute properties..
Answer: Substitution
◍ The most profitable price which a property should bring in a competitive
and open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is
