INCOME and EXPENSE Questions

1. For analysis, the appraiser gathers the subjects income and expense date from the property owner to assist in developing a
   1. Reconstructed operating statement
   2. Rent adjustment
   3. Rent survey
   4. Vacancy loss

2. Analysis of a two-unit property includes developing appropriate replacement reserves for the subject property. Rounded to the nearest dollar, what should be the total annual replacement reserve for the property?
   1. $1,862
   2. $1,955
   3. $2,863
   4. $2,925

ANNUAL REPLACEMENT RESERVE PROBLEM
Item	Years Remaining	Estimated Cost
Carpet	4	$2,100
HVAC	8	$8,000
Appliances	6	$2,600
Roof	9	$8,700

3. Rounded to the nearest dollar, if the EGI for a three-unit property is $22,560, what is the NOI if the net income ratio is 46.57%?
   1. $10,506
   2. $11,731
   3. $12,337
   4. $13,636

4. Which is a TRUE statement regarding a management expense for a property manager?
   1. A management fee is an outside expense and never included in a propertys operating expenses.
   2. It is only estimated when the property has a property manager.
   3. A management fee is estimated when it is common in the market to pay a manager or compensate the owner.
   4. A management fee is not an operating expense when the owner manages the property.

5. Once a rent survey of comparable rental properties is completed by an appraiser, the data
   1. Are treated as stored data by the appraiser for use in future assignments.
   2. Can never be used in other assignments.
   3. Lack relevance for other assignments.
   4. Need not be reanalyzed for relevance for use in future assignments.

6. A quality rent survey requires that comparable properties are similar to the subject in all respects EXCEPT
   1. Identical rent amounts
   2. Lease terms and conditions
   3. Locational desirability
   4. Physical characteristics

7. If a four-unit apartment building with a PGI of $950 per unit had a total vacancy of 63 days during the year, what was the EGI?
   1. $40,380
   2. $41,570
   3. $43,630
   4. $45,790

8. Given this date and these adjustments: Per bedroom = $100; Central A/C = $125; Garage = $100, what is the adjusted rent indication for the subject rental unit?
   1. $925
   2. $950
   3. $975
   4. $100

ADJUSTMENT RENT PROBLEM
	Subject	Rental #1	Rental #2	Rental #3
Monthly Rent	--	$1,075	$750	$950
Bedrooms	5	5	4	5
Central A/C	Yes	Yes	No	No
Garage	None	Yes	None	Yes

9. For determining net operating income, which is not treated as an operating expense of an investment property?
   1. Management fees
   2. Property insurance
   3. Replacement reserves
   4. Vacancy loss

10. For a four-unit apartment building, what is the observed vacancy rate if the total number of days during a one-year period for all units without being rented was 52? Round your answer to the nearest hundredth.
    1. 2.97%
    2. 3.12%
    3. 3.56%
    4. 4.27%

11. An investment property generates $36,000 annually in potential gross income. Based on this date, what is the net operating income entered on the reconstructed operating income statement?
    1. $20,557
    2. $21,394
    3. $22,993
    4. $24,783

OPERATING EXPENSES
Item	Annual Amount
Reserve for Roof Replacement	$600
Real Estate Taxes	$2,637
Snow Removal	$600
Reserve for Carpet Replacement	$550
Building Maintenance	$2,400
Insurance	$1,850
Management Fees (3.5% of EGI)	$1,212
Vacancy @ 3.8%	$1,368

12. Rounded to the nearest dollar, if the EGI for a four-unit property is $57,267, what is the NOI if the net income ratio is 41.57%?
    1. $23,806
    2. $25,657
    3. $27,255
    4. $29,889

13. A rent roll primarily refers to a
    1. Brief detail of the effective dates, lease terms, and contract rents of the subject property.
    2. Clause in the lease that allows the terms to continue or roll-over to an additional period.
    3. Compilation of comparable rental rates for a specific property type in a specific market.
    4. Summary of the amenities and services being included with the leased property.

14. Using these adjustments: Bedroom $75, Central A/C $50, Covered parking $25, and the data in this table, what is the indicated adjusted rent to be applied to the subject?
    1. $1,050
    2. $1,200
    3. $1,250
    4. $1,275

RENT ADJUSTMENTS PROBLEM
	Subject Unit	Comparable #1	Comparable #2
Contract Rent (Monthly)	--	$1,225	$1,075
Bedrooms	3	3	2
Central A/C	Yes	Yes	No
Covered Parking	None	Yes	None

15. A rent survey should include properties that share similar items. Which is NOT a consideration?
    1. Lease terms and conditions
    2. Locational desirability
    3. Physical characteristics
    4. Tenant demographics