Certified Apartment Manager (CAM)
Study Exam questions and answers
Accural Accounting - ANSWER>>Records all income and expenses in the period
they were earned or incurred regardless of when the income was received or
expenses were paid.
Amount of Rent Increase - ANSWER>>Average Effective Rent for Renewal -
Average Effective Rent on Previous Lease
Annualization - ANSWER>>Average of actual months of expenses (or income)
divided by the number of months reported "x" 12
Average Effective Rent - ANSWER>>TRR/Units Occupied
Bad Debt - ANSWER>>Uncollected rental income due to non-payment
Breakeven Occupancy ratio - ANSWER>>(OE + DS + RR ) / EGI
Calculates the occupancy needed to pay all operating expenses, debt service
and any replacement reserves
Breakeven Rent Per Square foot - ANSWER>>(OE+DS+RR) / Total Property
Square foot
Calculates the cost per square foot to pay all operating expenses debt service
and any replacement reserves.
Capital Expense (CE) - ANSWER>>Costs for large improvements like appliances,
HVAC equipment, roofing, etc
Capitalization Rate "Cap rate" - ANSWER>>NOI ÷ Purchase Price = Cap Rate
,A rate of return that reflects the investor's desired ROI. The cap rate may be
determined in three ways:
NOI/Cap Rate = Value
NOI/Value = Cap Rate
Value*Cap Rate = NOI
Cash Accounting - ANSWER>>Records all income and expenses when they are
actually received or paid
Cash Flow - ANSWER>>NOI - DS - CE - RR = CF
The amount of remaining after all sources of income are collected and all
property operating expenses, including capital expenditures and/or
replacement reserves nd debt service are paid
Cash on return - ANSWER>>Cash flow / down payment (or inital equity) = Cash
on cash return
Measures the amount of cash earned against the original cash invested.
Debt Service - ANSWER>>The loan or mortgage payment. It covers the interest
on and retirement of an outstanding principial on a mortgage loan
Effective Gross income (EGI) - ANSWER>>GPR- VAC = TRR + OI = EGI
Total revenue for the property
Effective Market Rent - ANSWER>>(Monthly Market Rent x # of months in lease
- total concessions) ÷ # of months in lease
Identifies the average rent per unit less any concession value
,Extrapolation - ANSWER>>Uses of projections into the future that presume a
continuation of known data to plan future response
Gross Potential Income (GPI) - ANSWER>>Occupied Units x Average Leased Rent
+ Vacant Units x Average Market Rent = GPI
Gross Potential rent (GPR) - ANSWER>>Total # of Units x Average Market Rent =
GPR
Leased percentage - ANSWER>>Leased Units / Total Units
The portion or ratio of total units that are covered by a lease
Leased units - ANSWER>>Total Units - Vacant Units - Notices to Vacate + Vacant
Units Leased + Notices to Vacate Preleased
Identifies the total number of units covered by active leases as well as future
leases. Reflects an occupancy trend
Net Operating Income (NOI) - ANSWER>>EGI - OE = NOI
The total revenue that remains after all operating expenses, but before mortage
debt service and capital expenditures (or replace reserve payments) are
deducted.
Operating Expense (OE) - ANSWER>>(given on Operating Statement)
The total expenses, fixed and variable, to operate the property. Does not
include capital items.
Operating Expense Ratio (OER) - ANSWER>>OE / EGI = OER
The percentage of revenue used to pay operating expenses.
Percent Renewal Increase - ANSWER>>Amount of Increase / Previous Lease
Rent
Measures the amount of the increase as a portion of the old or previous rent
, Property Valuation - ANSWER>>The process of determining the value of a
property. The three most often used formulas as
-Cost Approach,
-Market Comparison and
- Income Approach.
Note the Income Approach is shown
Replacement Reserve (RR) - ANSWER>>May be included in capital expenditures.
The account used to set aside money for anticipated future expenses or large
projects.
Return on Investment (ROI) - ANSWER>>Return/Investment = Return on
investment
The benefit to the investor resulting from an investment
Total Rent Revenue (TRR) - ANSWER>>GPR- VAC = TRR
Total Rent and only rent collected, also known as "Net Rental income"
Turnover Ratio - ANSWER>>Total Number of Move-Outs ÷ Total Number of
Units
The total number of move-outs for a given period divided by the total
apartment units.
Vacancy/Collection loss (VAC) - ANSWER>>Vacancy, Collection Loss, Non-
Revenue Units, Concessions
Abandon - ANSWER>>To intentionally and permanently give up, surrender,
leave and desert or relinquish all interest or ownership in property, a home or
other premises, or a right of way. The word is often used in situations to
determine whether a resident has left his/her apartment and the property
inside and does not intend to come back.
Study Exam questions and answers
Accural Accounting - ANSWER>>Records all income and expenses in the period
they were earned or incurred regardless of when the income was received or
expenses were paid.
Amount of Rent Increase - ANSWER>>Average Effective Rent for Renewal -
Average Effective Rent on Previous Lease
Annualization - ANSWER>>Average of actual months of expenses (or income)
divided by the number of months reported "x" 12
Average Effective Rent - ANSWER>>TRR/Units Occupied
Bad Debt - ANSWER>>Uncollected rental income due to non-payment
Breakeven Occupancy ratio - ANSWER>>(OE + DS + RR ) / EGI
Calculates the occupancy needed to pay all operating expenses, debt service
and any replacement reserves
Breakeven Rent Per Square foot - ANSWER>>(OE+DS+RR) / Total Property
Square foot
Calculates the cost per square foot to pay all operating expenses debt service
and any replacement reserves.
Capital Expense (CE) - ANSWER>>Costs for large improvements like appliances,
HVAC equipment, roofing, etc
Capitalization Rate "Cap rate" - ANSWER>>NOI ÷ Purchase Price = Cap Rate
,A rate of return that reflects the investor's desired ROI. The cap rate may be
determined in three ways:
NOI/Cap Rate = Value
NOI/Value = Cap Rate
Value*Cap Rate = NOI
Cash Accounting - ANSWER>>Records all income and expenses when they are
actually received or paid
Cash Flow - ANSWER>>NOI - DS - CE - RR = CF
The amount of remaining after all sources of income are collected and all
property operating expenses, including capital expenditures and/or
replacement reserves nd debt service are paid
Cash on return - ANSWER>>Cash flow / down payment (or inital equity) = Cash
on cash return
Measures the amount of cash earned against the original cash invested.
Debt Service - ANSWER>>The loan or mortgage payment. It covers the interest
on and retirement of an outstanding principial on a mortgage loan
Effective Gross income (EGI) - ANSWER>>GPR- VAC = TRR + OI = EGI
Total revenue for the property
Effective Market Rent - ANSWER>>(Monthly Market Rent x # of months in lease
- total concessions) ÷ # of months in lease
Identifies the average rent per unit less any concession value
,Extrapolation - ANSWER>>Uses of projections into the future that presume a
continuation of known data to plan future response
Gross Potential Income (GPI) - ANSWER>>Occupied Units x Average Leased Rent
+ Vacant Units x Average Market Rent = GPI
Gross Potential rent (GPR) - ANSWER>>Total # of Units x Average Market Rent =
GPR
Leased percentage - ANSWER>>Leased Units / Total Units
The portion or ratio of total units that are covered by a lease
Leased units - ANSWER>>Total Units - Vacant Units - Notices to Vacate + Vacant
Units Leased + Notices to Vacate Preleased
Identifies the total number of units covered by active leases as well as future
leases. Reflects an occupancy trend
Net Operating Income (NOI) - ANSWER>>EGI - OE = NOI
The total revenue that remains after all operating expenses, but before mortage
debt service and capital expenditures (or replace reserve payments) are
deducted.
Operating Expense (OE) - ANSWER>>(given on Operating Statement)
The total expenses, fixed and variable, to operate the property. Does not
include capital items.
Operating Expense Ratio (OER) - ANSWER>>OE / EGI = OER
The percentage of revenue used to pay operating expenses.
Percent Renewal Increase - ANSWER>>Amount of Increase / Previous Lease
Rent
Measures the amount of the increase as a portion of the old or previous rent
, Property Valuation - ANSWER>>The process of determining the value of a
property. The three most often used formulas as
-Cost Approach,
-Market Comparison and
- Income Approach.
Note the Income Approach is shown
Replacement Reserve (RR) - ANSWER>>May be included in capital expenditures.
The account used to set aside money for anticipated future expenses or large
projects.
Return on Investment (ROI) - ANSWER>>Return/Investment = Return on
investment
The benefit to the investor resulting from an investment
Total Rent Revenue (TRR) - ANSWER>>GPR- VAC = TRR
Total Rent and only rent collected, also known as "Net Rental income"
Turnover Ratio - ANSWER>>Total Number of Move-Outs ÷ Total Number of
Units
The total number of move-outs for a given period divided by the total
apartment units.
Vacancy/Collection loss (VAC) - ANSWER>>Vacancy, Collection Loss, Non-
Revenue Units, Concessions
Abandon - ANSWER>>To intentionally and permanently give up, surrender,
leave and desert or relinquish all interest or ownership in property, a home or
other premises, or a right of way. The word is often used in situations to
determine whether a resident has left his/her apartment and the property
inside and does not intend to come back.
