Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 2

How do property management software typically display operating expenses?

1. On a quarterly basis

2. On an annual basis

3. As a percentage of total assets

4. On a per-unit or per-square foot basis

The correct answer is: On a per-unit or per-square foot basis

Property management software often displays operating expenses on a per-unit or per-square foot basis because this granularity allows property managers and owners to easily assess the cost efficiency associated with each specific unit or the overall property layout. By presenting expenses in this manner, stakeholders can make more informed comparisons and decisions regarding budgeting, cost control, and resource allocation. This method breaks down the operating expenses into more manageable metrics, facilitating a clearer understanding of how costs fluctuate with occupancy levels and property size. It helps in identifying underperforming units or areas that may need attention to optimize financial performance. Per-unit or per-square foot analysis is particularly useful in multi-family housing where various units may have different associated costs compared to standalone properties. Other methods of displaying operating expenses, such as quarterly or annual aggregates or percentages of total assets, may not provide the same level of insight into the operational aspects of individual units or space utilization.