Property Management
The capitalization rate used by Louisiana investors to value a property indicates:
AThe property's annual appreciation rate
BThe relationship between the property's net operating income and its market value — the investor's expected return before financing✓ Correct
CThe landlord's management fee percentage
DThe local property tax rate
Explanation
The cap rate (NOI ÷ Value) indicates the unlevered annual return an investor expects from a property based on its income relative to its price. Higher cap rates generally indicate higher risk or lower-quality locations.
Related Louisiana Property Management Questions
- A Louisiana property manager who fails to deliver the security deposit or an itemized list of deductions within the legal time period after lease termination may be liable to the tenant for:
- Under Louisiana law, a landlord must return a tenant's security deposit within how many days after the tenant vacates?
- A gross lease requires the tenant to pay:
- A Louisiana property manager discovers that the building they manage has structural deficiencies. Their immediate duty is to:
- The management fee structure for a Louisiana commercial property is typically based on:
- A Louisiana property manager is responsible for which of the following in multi-family housing?
- A Louisiana residential property manager receives a complaint from a tenant about a pest infestation. The manager's first obligation is to:
- In Louisiana, a written lease for a residential property must:
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