DC PROPERTY MANAGER EXAM

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DC PROPERTY MANAGER EXAM

UPDATED ACTUAL EXAM WITH

CORRECT SOLUTIONS.

Management Plan - correct answer- 1. Current use

• Current condition
• Fiscal projections
• Operational issues

Market Analysis - correct answer- Regional and neighborhood

evaluation focusing on:

• Demographic conditions
• Geographic features
• Governmental perspective
• Existing real estate supply
• Future developments
• Tenant demand

Analysis of Alternatives - correct answer- Theoretical costs and

potential for rent increase based on decision to:

• Modernize
• Rehabilitate
• Change 1 / 3

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• Convert

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.

• Functional Obsolescence is characterized by old or outdated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 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.

• Assessed Value - This is the value used by government tax

assessment offices. Since it is frequently 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".

• Market Value - This is the value that is agreed to between a

buyer and seller. It represents the "meeting of the minds". 2 / 3

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• Depreciated Value - This is used for income tax purposes

and affects a property's tax basis. In the past, the Federal Government has implemented accelerated depreciation programs to help promote economic growth.

• List price - This is only the price that the owner has offered to

sell a property for.

Rules of Ethics - correct answer- 1. Loyalty to the client

• Confidentiality
• Accurate accounting and reporting
• Protection of owner's funds
• Conflicts of interest
• Compliance with Laws and Regulations

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

• Improper financial reporting
• Improper financial reporting
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