CAM Data Analysis and Interpretation 2 — Questions and Answers
Question 1: A property manager notices that lease renewal rates dropped from 68% to 54% over two quarters. Which metric should they examine first to identify the root cause?
- Average rent per square foot trend
- Resident satisfaction survey scores by move-out reason (Correct answer)
- Gross potential rent calculation
- Capital expenditure budget variance
Correct answer: Resident satisfaction survey scores by move-out reason
Move-out reason data from satisfaction surveys directly identifies why residents chose not to renew, making it the most actionable starting point.
Question 2: Which KPI best measures the financial impact of unit downtime between tenancies?
- Gross potential rent
- Economic vacancy loss (Correct answer)
- Physical vacancy rate
- Net operating income
Correct answer: Economic vacancy loss
Economic vacancy loss captures the actual dollar amount lost due to vacant units, combining both physical vacancy and concessions.
Question 3: A 200-unit property collects $180,000 in rent against a gross potential of $210,000. What is the collection loss percentage?
- 10.0%
- 14.3% (Correct answer)
- 16.7%
- 85.7%
Correct answer: 14.3%
Collection loss = ($210,000 − $180,000) / $210,000 = $30,000 / $210,000 ≈ 14.3%.
Question 4: When comparing properties in a portfolio, which normalization technique makes expense data comparable across different-sized assets?
- Sorting expenses by dollar amount descending
- Expressing expenses as cost per occupied unit (Correct answer)
- Totaling all expenses across the portfolio
- Listing expenses alphabetically by category
Correct answer: Expressing expenses as cost per occupied unit
Cost per occupied unit removes the size distortion and allows fair benchmarking between a 50-unit and a 300-unit property.
Question 5: A manager wants to predict next month's maintenance costs. Which data set is most useful for building that forecast?
- Current year property tax assessment
- Rolling 12-month maintenance expense history by category (Correct answer)
- Last year's capital improvement spending
- Competitor property amenity lists
Correct answer: Rolling 12-month maintenance expense history by category
A rolling 12-month maintenance history captures seasonal patterns and trends that produce the most accurate short-term forecast.
Question 6: The debt service coverage ratio (DSCR) for a property is 1.05. What does this indicate?
- The property generates 5% more NOI than needed to cover debt payments (Correct answer)
- The property is generating a 5% cash-on-cash return
- The cap rate exceeds the interest rate by 5%
- The property owes 5% more debt than its appraised value
Correct answer: The property generates 5% more NOI than needed to cover debt payments
A DSCR of 1.05 means NOI is 105% of annual debt service, leaving only a slim 5% cushion above required loan payments.
Question 7: A scatter plot of rent levels versus occupancy rates across 15 comparable properties shows a negative correlation. What does this imply?
- Higher rents tend to be associated with lower occupancy at those properties (Correct answer)
- Higher rents always cause occupancy to decline regardless of amenities
- The data is too small to draw any conclusions
- Occupancy and rent are unrelated variables
Correct answer: Higher rents tend to be associated with lower occupancy at those properties
A negative correlation means that as rent increases across comparable properties, occupancy tends to decrease, suggesting a price-sensitivity relationship.
CAM Data Analysis and Interpretation 2
A property manager notices that lease renewal rates dropped from 68% to 54% over two quarters.
Which metric should they examine first to identify the root cause?