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

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Prepare for the CAPS Exam with a comprehensive study of Module 2. Utilize our practice resources filled with flashcards, multiple choice questions, and thorough explanations to ensure your success!

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How would you calculate gross potential rent (GPR) for an apartment building?

  1. By adding leasing commissions to monthly rent

  2. By multiplying occupied units by average rent and vacant units by market rent

  3. By subtracting liabilities from the total income

  4. By summing up total expenses incurred

The correct answer is: By multiplying occupied units by average rent and vacant units by market rent

Calculating Gross Potential Rent (GPR) involves assessing the maximum income an apartment building could generate if all units were rented at market rates. This method accurately accounts for both occupied and unoccupied units. By multiplying the number of occupied units by the actual average rent and the number of vacant units by the market rent, you can derive the total potential income that the property could achieve if all units were leased at current market rates. This approach recognizes that vacant units still hold value as they represent potential income. It’s essential to base the calculation of vacant units on market rent since this reflects the revenue that could be obtained in the current market environment, providing a comprehensive view of the property’s income potential.

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