Part 5 Income And Expense Analysis

Question 1

A ________ is a contract in which the rights to use and occupy land, space or structures are transferred by the owner to another for a specified period of time in return for a specified rent

Answer 1

Lease

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Question 2

_________ lease the landlord pays all of the operating expenses.
_________ lease the tenant pays all of the operating expenses

Answer 2

Gross

Net

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Question 3

A __________ lease is a lease that provides for periodic rent adjustments based on the market rental rate of the space

A Index
B Flat
C Percentage
D Revaluation

Answer 3

D Revaluation

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Question 4

A graduated rent lease has two types:
1 Step -____ lease where the payments increase at specified intervals
2 Step -______ lease where the payments decrease at specified intervals

Answer 4

1 Up
2 Down

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Question 5

A lease with a specified level of rent that continues throughout the lease term with set terms and payments is a:

Answer 5

Flat lease

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Question 6

________ is an amount paid for the use of land, improvements or a capital good

Answer 6

Rent

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Question 7

Vacancy & Collection Loss is commonly expressed as a ___________

A Percentage
B Multiplier
C Ratio
D Cookie

Answer 7

A Percentage

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Question 8

__________ expenses are paid whether or not the unit is occupied. Taxes and insurance

Answer 8

Fixed

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Question 9

___________ expenses are expenses that generally vary with the level of occupancy or the extent of services provided

Answer 9

Variable

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Question 10

______ __________ income is the actual or anticipated net income that remains after all operating expenses are deducted from EGI, but before mortgage debt Service and book depreciation are deducted

Answer 10

Net Operating

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Question 11

____-____ cash flow is the portion of net Operating Income that remains after total mortgage debt Service is paid but before income tax on operations is deducted

Answer 11

Pre-tax cash flow (PTCF)

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Question 12

The ratio of total operating expenses to effective gross income (TOE)/EGI)

Answer 12

Operating Expense Ratio (OER)
OER = 1 - NIR

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Question 13

The ratio of net operating income to effective gross income (NOI/EGI)

Answer 13

Net Income Ratio (NIR)
NIR = 1 - OER

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Question 14

OER, the ________ _________ Ratio, is the ratio of total operating expenses to EGI.

OER = Operating Expenses/ EGI

Answer 14

Operating Expense Ratio

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Question 15

The ratio of net operating income to annual debt service

Answer 15

Debt Coverage Ratio (DCR)
… measures the relative ability of a property to meet its debt service out of net operating income; also called Debt Service Coverage Ratio (DSCR)

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Question 16

An allowance that provides for the periodic replacement of short-lived building components that wear out more rapidly

Answer 16

Replacement Allowance

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