Module Four Quiz:

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Question 1 of 7

1. Question
What do you need to know the average nightly rate of a property for?
- 1. To determine the estimated cap rate of the property when doing an initial analysis on the home for your client.
- 2. To determine whether or not there is room for more owners in same area to also list their properties without diluting the market
- 3. To determine the occupancy rate
- 4. None of the above
Question 2 of 7

2. Question
What do you need to know the average nightly rate of a property for?
- 1. To determine the estimated cap rate of the property when doing an initial analysis on the home for your client.
- 2. To determine whether or not there is room for more owners in same area to also list their properties without diluting the market
- 3. To determine the occupancy rate
- 4. None of the above
Question 3 of 7

3. Question
What is rate optimization technology?
- 1. Crowdsourced data that determines the average nightly rate annually for a specific community
- 2. An algorithm that is used in technology platforms to set the nightly rate depending on specific data points such as the timing of the booking and local events happening.
- 3. A heatmap showing where the lowest rates can be found at any given moment around the world.
- 4. Artificial intelligence technology that uses captured data from the users IP address to determine which homes will show up in their search first
Question 4 of 7

4. Question
Which is an example of a variable expense on a vacation rental?
- 1. An owner increasing the nightly rate monthly until they get it to the maximum the market will support
- 2. Two users on an OTA looking at the same property on different laptops at the same time but seeing different rates
- 3. The cost of heating a pool in winter
- 4. None of the above
Question 5 of 7

5. Question
What is the difference between a cap rate and a cash on cash return?
- 1. The cap rate measures the return on the net operating income annually and the cash on cash return measures the return on the gross potential income annually
- 2. The cap rate measures the return on the occupancy rate monthly and the cash on cash return measures the return on the money invested out of pocket by the investor
- 3. The cap rate measures the return on the total amount borrowed by the investor and the cash on cash return measures the net operating income monthly
- 4. The cap rate measures the return on the total amount borrowed and out of pocket by the investor and the cash on cash return measures the return on only the money invested out of pocket by the investor
Question 6 of 7

6. Question
In the event of large appreciation potential which investor would most likely be willing to care less about a lower cap rate
- 1. A lifestyle investor buying to use it quite a bit
- 2. A traditional investor that wants to see a high cash flow
- 3. A fund looking for guaranteed returns
- 4. None of the above
Question 7 of 7

7. Question
What is the net operating income?
- 1. The total amount of cash flow into the property over the course of the year
- 2. The total amount of cash flow when compared to the occupancy
- 3. The total amount of cash flow that is left over after all expenses are paid before tax and mortgages
- 4. All of the above

Module 4: Understanding Income and Expenses

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