Ch 12 Test Flashcards
Which of the following must take the form of a written document?
a. management agreement
b. property maintenance report
c. property management designation
d. management plan
A: Management agreement
must be in writing AND signed by both parties
A property manager would likely be concerned with all of the following except:
a. trends in family size and lifestyles
b. local employment levels
c. market rental rates
d. local commission rates on real estate sales
d. local commission rates on real estate sales
not relevant to the business of leasing and managing properties
Which of the following statements best describes the relationship between a management proposal and a management plan?
a. the management plan is put into effect by means of the management proposal
b. the management proposal becomes the management plan when it is accepted by the property owner
c. the management plan is always developed first, before the management proposal
d. there is no relationship between the management plan and the management proposal
B: The management proposal becomes the management plan when it is accepted by the property owner
Which of the following properties would normally have the highest turnover rate for tenants?
a. apartment building
b. shopping mall
c. office tower
d. an industrial park
a. apartment building
The types of businesses operated by tenants is usually of greatest concern to a manager of:
a. retail property
b. office property
c. residential property
d. industrial property
A: Retail property
retail property managers need to pay particular attention to the types of business operated by tenants since the success of a shopping center depends on obtaining right mix of business
A description of the duties and powers of the property manager would most likely be found in the management:
a. plan
b. agreement
c. proposal
d. schedule
B: Agreement
step 1 - management agreement
relationship between manager and owner is established
The most common form of advertising for residential rental property is:
a. direct mail
b. display advertising
c. online or small classifieds
d. broadcast advertising
C: Online or small classifieds
A property manager’s preliminary study normally covers four basic areas of analysis:
a. the region, the neighborhood, the property, and the market
b. the economy, the site, the market, and occupancy rates
c. occupancy rates, absorption rates, interest rates, and property values
d. the building, the site, the neighborhood, and the city
a. the region, the neighborhood, the property, and the market
The property manager’s report to the property owner often takes the form of a ___
a. maintenance schedule
b. property management agreement
c. rental schedule
d. statement of opertions
d. statement of operations
A clause in a lease stating that the lease will be automatically renewed at the end of its term unless one of the parties gives the other notice of intent to terminate the lease is called a/an:
a. a rollover clause
b. periodic renewal clause
c. automatic renewal clause
d. option clause
C: Automatic renewal clause
lease will be automatically renewed at the end of the term unless one party notifies the other of an intent to terminate the lease
The difference between the value of a property and the total amount of the liens against it is called:
a. cash flow
b. equity
c. appreciation
d. cash on cash
B: Equity
A lease must be in writing if the:
a. annual rent is greater than $10k
b. property will be occupied by the tenant as his primary residence
c. term of the lease is longer than one year
d. tenant is an individual and not a business
C: Term of the lease is longer than one year
must be in writing:
- leases for longer than one year
- any lease for property managed by a real estate brokerage
A property’s variable expenses include:
a. property taxes and utilities
b. utilities and maintenance expenses
c. maintenance expenses and insurance premiums
d. utilities and debt service
B: Utilities and maintenance expenses
fluctuate month to month
not insurance premiums, debt service or taxes
The ability to take full advantage of an investment’s appreciation without having to invest the full cost of the investment is a result of:
a. leverage
b. cash flow
c. yield
d. equity
A: Leverage
leverage is using borrowed money to invest in an asset
leveraged investor therefor earns money on money borrowed as well as money invested
A list of all the rental rates assigned to the various units in a property is called a:
a. rent roll
b. rental schedule
c. rental list
d. rental budget
b. rental schedule
- rent roll = how much each person in building is paying; summary report on the collection of rent, obtained from individual ledger sheets kept on each tenant and rental space;
- rent schedule = just a list of assigned rental rates
