Practice Test GeeksCRLS - Certified Residential Leasing Specialist Practice Test
← All CRLS Flashcard Decks

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.

Read the first 7 Investment Analysis & ROI flashcards as text

  1. A property's NOI is $100,000 and the lender is considering a $1,000,000 loan. What is the debt yield?

    Answer: 10%

    Debt yield = NOI ÷ loan amount = $100,000 ÷ $1,000,000 = 10%.

  2. A duplex has NOI of $36,000 and a monthly mortgage payment of $2,400. What is its annual cash flow before taxes?

    Answer: $7,200

    Annual debt service is $28,800, so cash flow = $36,000 − $28,800 = $7,200.

  3. In rental property analysis, 'equity build-up' from financing primarily refers to:

    Answer: The portion of loan payments that reduces principal

    Each amortizing payment reduces principal, increasing the owner's equity.

  4. An investor buys a rental for $500,000, of which $100,000 is allocated to land. What is the approximate annual straight-line depreciation?

    Answer: $14,545

    Depreciable basis is $400,000 ÷ 27.5 years ≈ $14,545 per year.

  5. Which component of a residential rental investment can NOT be depreciated?

    Answer: Land

    Land does not wear out, so the IRS does not allow it to be depreciated.

  6. An $8,000 kitchen upgrade allows rent to increase by $100 per month. What is the annual return on the renovation cost?

    Answer: 15%

    Annual added rent is $1,200, and $1,200 ÷ $8,000 = 15%.

  7. Why is IRR often preferred over cash-on-cash return when evaluating a multi-year hold?

    Answer: It accounts for the timing of all cash flows, including resale

    IRR incorporates the time value of money across every period, including the reversion at sale.

How this page was made: written with AI tools and published by Nathan Beja, founder of Practice Test Geeks, who is responsible for its content. We have not yet matched this exam's facts to an official source, so confirm fees, dates and rules with the exam body. Not reviewed by a subject-matter expert. Editorial policy