Quiz 21: Enhancing Value Through Ongoing Management


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).

The correct answer is option (b) CPM. To earn the designation, property managers must have a minimum of five years of full-time decision-making activity in real estate management, take numerous educational courses, and pass a rigorous exam. In addition, CPMs must agree to continuous education to keep their certifications current and abide by the highest standards of professional ethics.

An improvement, such as rehabilitation, should be undertaken only if the value added to the property exceeds the cost of improvements, which include material, labor, the contractor's profit, architect's fees, and an allowance for contingencies. If the rehab work prevented the owner from renting all or part of the structure for some period of time, the present value of the lost net rental income should be included as a cost.