Practice Test GeeksCAPS - Certified Apartment Portfolio Supervisor Practice Test
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Financial Management and Budgeting Flashcards

6 cards from real CAPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Financial Management and Budgeting flashcards as text

  1. What is the formula for calculating Gross Rent Multiplier (GRM)?

    Answer: Property Value ÷ Gross Annual Rent

    GRM equals the property's market value divided by its gross annual rental income and provides a quick valuation comparison.

  2. In apartment portfolio management, what is 'expense reimbursement' income?

    Answer: Income collected from tenants for utilities or services they are billed back for

    Expense reimbursements are charges passed through to residents for utilities, CAM charges, or other services included in their lease obligations.

  3. What financial metric is used to evaluate the efficiency of a property's operations regardless of its financing structure?

    Answer: Operating Expense Ratio (OER)

    The Operating Expense Ratio (OER) measures total operating expenses as a percentage of gross income, independent of how the property is financed.

  4. A CAPS supervisor is evaluating whether to refinance a portfolio property. Which factor most directly affects the refinancing decision?

    Answer: Current interest rates vs. existing loan rate and remaining loan term

    Refinancing is viable when current rates are sufficiently below the existing rate to justify costs within the remaining investment horizon.

  5. Which budgeting method allocates costs to individual properties based on usage or square footage rather than equally across the portfolio?

    Answer: Activity-Based Costing (ABC)

    Activity-Based Costing assigns indirect costs to properties based on actual resource consumption, producing more accurate property-level financials.

  6. What does 'break-even occupancy' indicate for an apartment property?

    Answer: The minimum occupancy rate needed to cover all operating expenses and debt service

    Break-even occupancy is calculated as (Operating Expenses + Debt Service) ÷ Gross Potential Rent, indicating the minimum occupancy to avoid cash losses.