REA Study Guide 2026
Everything you need to pass the REA exam in one place: the exam format, every topic to study, real practice questions with explanations, flashcards, and full-length practice tests. Free, no sign-up needed.
📋 REA Exam Format at a Glance
📚 REA Topics to Study (22)
✍️ Sample REA Questions & Answers
1. Under the Tax Cuts and Jobs Act of 2017, the first-year bonus depreciation percentage for qualifying property placed in service after September 27, 2017 was set at:
The TCJA increased bonus depreciation to 100% for qualified property placed in service after September 27, 2017, before the phased reduction began in 2023.
2. What is the primary purpose of a real estate feasibility study?
A feasibility study evaluates whether projected revenues, construction costs, and financing conditions will generate returns that meet investor thresholds.
3. In development underwriting, what is an 'interest reserve'?
An interest reserve is built into the construction loan budget to fund interest payments during the construction period when the property generates no income.
4. A commercial real estate loan has an LTV of 65% and DSCR of 1.30x. What does this tell an analyst?
A 65% LTV means significant equity cushion, and a 1.30x DSCR confirms income comfortably exceeds debt payments — both indicators of conservative underwriting.
5. What is the role of the Real Estate Settlement Procedures Act (RESPA)?
The Real Estate Settlement Procedures Act (RESPA) plays a vital role in protecting consumers during real estate transactions. Its primary purpose is to ensure greater transparency regarding settlement costs, requiring lenders and brokers to provide clear disclosures about fees and services. RESPA also aims to eliminate abusive practices, such as kickbacks and unearned fees, thereby preventing fraud and allowing consumers to make informed decisions.
6. What is 'economic occupancy' versus 'physical occupancy' in property management?
Physical occupancy is a space metric (% leased), while economic occupancy is an income metric (% of potential rent collected), accounting for free rent and delinquencies.