Practice Test GeeksCRLS - Certified Residential Leasing Specialist Practice Test
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Investment Analysis & ROI Flashcards

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

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  1. A rental property produces $60,000 in net operating income and was purchased for $750,000. What is its capitalization rate?

    Answer: 8.0%

    Cap rate = NOI ÷ price = $60,000 ÷ $750,000 = 8.0%.

  2. An investor puts $150,000 cash into a property that produces $12,000 in annual pre-tax cash flow. What is the cash-on-cash return?

    Answer: 8.0%

    Cash-on-cash = annual pre-tax cash flow ÷ cash invested = $12,000 ÷ $150,000 = 8%.

  3. A fourplex sells for $480,000 and collects $60,000 in gross annual rent. What is its gross rent multiplier (GRM)?

    Answer: 8

    GRM = price ÷ gross annual rent = $480,000 ÷ $60,000 = 8.

  4. A property has NOI of $90,000 and annual debt service of $72,000. What is its debt service coverage ratio (DSCR)?

    Answer: 1.25

    DSCR = NOI ÷ annual debt service = $90,000 ÷ $72,000 = 1.25.

  5. Under current IRS MACRS rules, over what period is a residential rental building depreciated?

    Answer: 27.5 years

    Residential rental property is depreciated straight-line over 27.5 years; 39 years applies to nonresidential property.

  6. Which item is NOT deducted when calculating net operating income (NOI)?

    Answer: Mortgage principal and interest

    NOI is calculated before debt service, so mortgage payments are excluded.

  7. A 40-unit community raises rents $50 per unit per month with no added expenses. At a 6% market cap rate, how much value is added?

    Answer: $400,000

    Added NOI is $50 × 40 × 12 = $24,000, and $24,000 ÷ 0.06 = $400,000 in value.

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