Chapter 28 - Property Management Tools

Question 1

Capitalization Rate

Answer 1

Rate of interest considered a reasonable return on investment; commonly used in the process of determining value based on net income

Question 2

Corrective Maintenance

Answer 2

Restores broken or failed equipment to a specified condition.

Question 3

Cosmetic Maintenance

Answer 3

Increases a property’s appeal.

Question 4

Gross Rent Multiplier (GRM)

Answer 4

A number derived from comparable rental properties in an area, which is then used to estimate the value of real estate.

Question 5

Management Proposal

Answer 5

A plan created by the property manager for overseeing the property, including market analysis, and developing a variety of financial reports including the operating budget.

Question 6

Market Rent

Answer 6

What the property could rent for in the open market if unencumbered by any lease and available.

Question 7

Net Operating Income

Answer 7

Income left after all operating costs are paid

Question 8

Preventive Maintenance

Answer 8

Includes routine maintenance and inspections to keep equipment and the property in good working order

Question 9

Rent Roll

Answer 9

Spreadsheet or listing of key information about a property (ie total number of units, tenants names and apartment numbers, lease dates, ad the rent each tenant pays)