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Property Evaluation & Analysis Flashcards

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

Read the first 7 Property Evaluation & Analysis flashcards as text

  1. A leasing professional is calculating the economic occupancy rate for an apartment community. The property has 200 units at a market rent of $1,200/month, but concessions total $15,000/month. What is the economic occupancy rate if gross potential rent is $240,000?

    Answer: 93.75%

    Economic occupancy = (Gross Potential Rent - Concessions) / Gross Potential Rent = ($240,000 - $15,000) / $240,000 = 93.75%.

  2. When evaluating a competing property, which metric best indicates how quickly units are absorbed by the market?

    Answer: Absorption rate

    Absorption rate measures how quickly available units are leased over a given time period, indicating market demand strength.

  3. A property's net operating income (NOI) is $180,000 and the cap rate in the local market is 6%. What is the estimated market value of the property?

    Answer: $3,000,000

    Market Value = NOI / Cap Rate = $180,000 / 0.06 = $3,000,000.

  4. Which of the following best describes a Class B apartment community?

    Answer: Older property with average amenities targeting middle-income renters

    Class B properties are typically older, well-maintained communities with average amenities serving the middle-income renter segment.

  5. A leasing professional is conducting a competitive market analysis (CMA). Which factor would be LEAST relevant when selecting comparable properties?

    Answer: Owner's personal investment strategy

    A CMA focuses on physical and market characteristics of properties, not the owner's personal financial goals.

  6. What does the term 'submarket' refer to in multifamily property analysis?

    Answer: A defined geographic area within a broader market with similar supply/demand dynamics

    A submarket is a geographically defined area within a larger market that shares similar economic and demographic characteristics affecting supply and demand.

  7. When reviewing a rent roll, a leasing manager notices that 15 of 100 units are month-to-month leases. What is the primary risk this presents?

    Answer: Increased vacancy exposure due to short notice move-outs

    Month-to-month leases can terminate with short notice (often 30 days), creating unpredictable vacancy spikes and revenue instability.