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Free CPM Practice Questions

10 free, exam-style Certified Property Manager (CPM) practice questions with answers and explanations. No signup required. Work through them below, then take the full free CPM practice test to study every exam domain.

The CPM exam has 150 questions and runs 4 hours.

Question 1

Good reasons for deferring maintenance on a commercial property include all of the following EXCEPT:

  1. Insufficient budget allocation or lack of adequate time to complete the work properly
  2. Adverse weather conditions or seasonal limitations that prevent safe completion of work
  3. Required specialized equipment or certified contractors are currently unavailable
  4. No tenants have complained about the issue yet
Show answer & explanation

Correct answer: D - No tenants have complained about the issue yet

Question 2

A property generates annual Net Operating Income of $250,000 and the market capitalization rate is 8%. Using the income capitalization approach, the estimated property value is:

  1. $2,000,000
  2. $3,125,000
  3. $20,000,000
  4. $2,500,000
Show answer & explanation

Correct answer: B - $3,125,000

Question 3

Three months after completing fair housing training, the property manager observes leasing agents conducting property tours and reviews their application processing procedures for compliance. This evaluation measures Kirkpatrick Level:

  1. Level 1 - Reaction
  2. Level 2 - Learning
  3. Level 3 - Behavior
  4. Level 4 - Results
Show answer & explanation

Correct answer: C - Level 3 - Behavior

Question 4

A property has a capitalization rate of 7.0% and the mortgage constant on its financing is 8.5%. The investor is experiencing:

  1. Positive leverage - the property's return exceeds the cost of borrowing
  2. Negative leverage - the cost of borrowing exceeds the property's return
  3. Neutral leverage - the property's return equals the cost of borrowing
  4. Zero leverage - the property operates without any debt financing
Show answer & explanation

Correct answer: B - Negative leverage - the cost of borrowing exceeds the property's return

Question 5

A retail tenant has a percentage lease with base rent of $60,000/year and a 6% overage clause. If annual gross sales are $1,400,000, what is the total annual rent? (Note: The natural breakpoint = Base Rent ÷ Percentage Rate)

  1. $60,000
  2. $84,000
  3. $144,000
  4. $24,000
Show answer & explanation

Correct answer: B - $84,000

Question 6

Two weeks into a new project, team members are disagreeing about priorities, challenging the project leader's decisions, and competing for influence within the group. According to Tuckman's model, this team is in the:

  1. Forming stage
  2. Storming stage
  3. Norming stage
  4. Performing stage
Show answer & explanation

Correct answer: B - Storming stage

Question 7

A property owner instructs the property manager to deny an apartment application based on the applicant's national origin. Applying the IREM Five Question Method, the first question - 'Is it legal?' - yields:

  1. Yes - property owners have the right to select tenants based on any criteria they choose
  2. No - discrimination based on national origin violates the Federal Fair Housing Act
  3. It depends - fair housing laws vary and may not apply in this jurisdiction
  4. Yes - the property manager is not personally liable when following the owner's instructions
Show answer & explanation

Correct answer: B - No - discrimination based on national origin violates the Federal Fair Housing Act

Question 8

A property has Net Operating Income of $180,000, annual debt service of $120,000, and the investor's initial equity investment is $750,000. What is the cash-on-cash return?

  1. 24.0%
  2. 16.0%
  3. 8.0%
  4. 6.0%
Show answer & explanation

Correct answer: C - 8.0%

Question 9

A property valued at $2,000,000 is insured for $1,200,000 with an 80% co-insurance clause. A covered loss of $400,000 occurs. How much will the insurance company pay?

  1. $400,000
  2. $300,000
  3. $240,000
  4. $1,200,000
Show answer & explanation

Correct answer: B - $300,000

Question 10

Of the Four Financial Tests used in IREM's CPM curriculum (Cash-on-Cash Return, Value Enhancement, Net Present Value, and Internal Rate of Return), which does NOT account for the time value of money?

  1. Net Present Value
  2. Internal Rate of Return
  3. Cash-on-Cash Return
  4. Value Enhancement
Show answer & explanation

Correct answer: C - Cash-on-Cash Return

What's on the CPM exam

The Certified Property Manager (CPM) exam is organized into 7 knowledge domains. These free practice questions are drawn from across them so you can see where you're strong and where to study:

  1. Marketing and Leasing
  2. Maintenance and Operations
  3. Legal and Risk Management
  4. Finance and Asset Management
  5. Ethics
  6. Human Resources and Leading a Team
  7. Property Valuation and Management

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