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Unformatted text preview: CHAPTER 22 Enhancing Value through Ongoing Management Test Problems 1. The Institute of Real Estate Management (IRM) awards which of the following designations? b. CPM. 2. A contractual relationship where an individual must act in the best interests of a principal when dealing with a third party is termed: a. An agency relationship. 3. The requirement of a real estate manager to act in the best interests of the landlord when dealing with a tenant is termed: c. A fiduciary responsibility 4. Which of these is not typically a responsibility of a property manager? d. Income tax analysis. 5. Remodeling and rehabilitation: c. Are expected to add value to the property. 6. Both the owner and the manager may be better off if managements compensation were based on a percentage of the propertys: c. Net operating income. 7. The following are necessary for a lease to be valid, except: c. Tenants contact phone number, or address, in the event of an emergency. 8. The asset manager is NOT responsible for: c. Making maintenance decisions. 9. Demolition of an existing property on an urban site will likely occur: c. When the site value, assuming a new use, exceeds the value of the site under its existing use, plus the cost of demolition. 10. For non-real estate corporations, which of the following is not a potential advantage of a real estate sale-leaseback? c. The firm benefits from property appreciation that occurs after the sale- leaseback. 22-1 Study Questions 1. An investor purchased a property with an equity investment of $100,000 and an $800,000 mortgage. She has held the property for five years, and the mortgage now has a balance of $750,000. The market value of her property is estimated to be $950,000. What is her present equity investment? Solution : Her current equity investment in the property is $200,000, which is equal to the current market value of the property ($950,000) minus the current loan balance ($750,000). 2. What should be included as costs to be matched by value added after rehabilitation?...
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This note was uploaded on 03/31/2008 for the course REAL 3000 taught by Professor Peng,liang during the Spring '08 term at Colorado.
- Spring '08