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RES 1402 - Property Management > Final > Flashcards

Final Flashcards

1
Q

Potential Gross Income

A

All available space x base rent

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2
Q

Vacancy Rate

A

Percentage of probable loss resulting from vacancies, tenant defaults and turnovers.

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3
Q

Effective Gross Income
Or
Gross Collectible Rental Income

A

Potential Gross Income minus Vacancy Rate

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4
Q

Operating Expenses

A 
Salaries
Utilities
Contract services (lawn, trash, elevator, security)
Supplies and equipment 
Advertising and management
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5
Q

Net Operating Income

A

Effective Gross Income minus variable Operating Expenses.

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6
Q

Fixed Expenses

A

An expense item in property’s operating budget that does not fluctuate with rental income. Ex: debt service and capital improvements.

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7
Q

Cash flow

A

Net operating income minus fixed expenses

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8
Q

Equity

A

Interest in a property over and above liens or financial encumbrances.

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9
Q

Cash on Equity
Or
Rate of Return

A

Cash flow divided by equity.

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10
Q

Supply and Demand

A

Principle that follows the interrelationship of the supply of and the demand for real estate, recognizing that real property is subject to the influences of the marketplace just as any other commodity.

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11
Q

Tenant qualification

A

Determining the prospects spatial needs, urgency to move, motives, and financial ability in order to determine if the manager has space appropriate for the prospect.

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12
Q

Managing maintenance staff

A

Handling tenant requests in a pleasant, efficient manner. Accomplished by deploying effective practices and software.

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13
Q

Management plan

A

The financial and operational strategy for the ongoing management of the property. Based on market analyses, a property analysis, and the owners goals and consists of an operating budget, a five-year forecast, and sometimes a comparative income and expense analysis.

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14
Q

Regional market analysis

A

A report detailing demographic and economic information on the regional or metropolitan area in which the subject property is located and used to interpret economic trends for the purposes of a management plan.

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15
Q

Neighborhood analysis

A 
An assessment of five factors in the neighborhood market area of the subject rental property:
Boundaries and land usage
Transportation and utilities
Economy
Supply and demand
Neighborhood amenities and facilities
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16
Q

Market analysis

A

Regional and neighborhood study of economic, demographic, and other information made by the property manager to determine supply and demand, market trends, and other factors important and leasing and operating a specific property.

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17
Q

Property analysis

A

Hey study made to familiarize a property manager with the nature and condition of the building, its position relative to comparable properties, and it’s estimated income and operating expenses.

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18
Q

Managing the property management office

A

Maintaining records and producing reports that provide overall information the guides both the management company and its clients/owners and making business decisions.

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19
Q

Management office filing system

A
  1. Lease file
  2. General correspondence file
  3. Work estimates file
  4. Financial file
  5. Permanent file
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20
Q

Tenant relations

A 
Establishing a sound landlord-tenant relationship
Collecting rents on time
Lease renewals
Lamenting rent increases
Terminating tenancy
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21
Q

Types of leasehold estates

A

Estate for years
Estate from period to period
Tenancy at will
Tenancy at sufferance

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22
Q

The Formula

A

PGI - VR = EGI
EGI - OE = NOI
NOI - FE = CF
CF / E = CR

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23
Q

Estate for years

A

A leasehold estate that continues for a specified period of time. It is not ordinarily terminated by death of either party or by the sale of the property.

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24
Q

Estate from period to period

A

A leasehold estate that is automatically renewed for successive periods of time until either party gives notice to the other.

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25
Tenancy at sufferance
Tenant who originally obtain possession of the premises legally, but continues to occupy the property after expiration of the leasehold interest without consent of the owner.
26
Tenancy at will
An estate that gives the tenant the right of possession for an indefinite period until the estate is terminated by either party or the death of either party.
27
Gross lease
A common residential lease under which the tenant pays a fixed rental and the landlord pays all operating expenses for the property.
28
Index lease
A lease containing an escalation clause that is tied to an index
29
Marketing property
Developing an advertising campaign strategy and gauging it's effectiveness Understanding the advantages and disadvantages of various advertising methods Appreciating the importance of the promotional efforts by management and the value of personal selling efforts of the manager
30
Net lease
Tenant pays rent plus certain costs incurred in the operation of the property
31
Double net lease
Tenant pays rent, utilities, real estate taxes, assessments, and insurance premiums
32
Triple net lease
Tenant pays rent, utilities, real estate taxes, assessments, and insurance premiums plus agreed on items of maintenance and repair.
33
Parcel ID
Tax district, book number, page number, index number
34
Risk management theory
``` Identifying and managing Avoiding Controlling Retaining Transferring Monitoring decisions ```
35
Identifying And Measuring Risk
Surveying physical structure, operating equipment, and tasks performed by Maintenance personnel. Information may be gathered from other sources such as Internet, public records, fire department.
36
Avoiding risk
Not managing hazardous properties, eliminating dangerous equipment, eliminating hazardous operations. Hiring contractors who provide evidence for Workmen's Comp and commercial or automotive liability.
37
Controlling risk
Reduce the likelihood of the lost event occurring and reduce its impact. Emergency preparedness, adequate crisis response plans.
38
Retaining risk
Keeping the cause of the risk, but evaluating the position of the owner or manager to absorb the financial consequences of losses.
39
Transferring risk
A technique by which insurance is purchased for funding risks that cannot otherwise be retained, avoided, are transferred to others.
40
Monitoring areas of risk
Determining whether changes must be made to improve the effectiveness of the risk management plan. Evaluating new operations or properties for risk management.
41
Cooperative
Title is held by trust or corporation that is owned by and operated for the benefit of persons living within the building, who are the beneficial owners of the trust or stockholders of a corporation. Each owner possesses a proprietary lease that gives them the right to occupy a certain unit within the building.
42
Condominium
Each occupant of a multiunit building owns his or her dwelling unit separately plus an undivided interest with the other owners in the properties common elements.
43
Management contract
Contract between the principal and agent that outlines the manager's scope of authority, owner's responsibilities, and compensation.
44
Business cycle
``` Wavelike movement of increasing and decreasing economic prosperity consisting of four phases: Expansion Recession Contraction Revival ```
45
Real estate cycle
Sequence of strength and weaknesses that occurs in the real estate segment of the general business economy; phases of the cycle are influenced by, but are not identical to, those of the business cycle.
46
Terms
``` Security deposits Concessions Rent schedules and rebates Length of lease Tenant alterations Expansion options Non-competing restrictions ```
47
Types of concessions for commercial and industrial property
Defraying moving expenses Unexpired lease buyouts, assumption, subletting Free rents
48
Reduction factor
As values within a tax district increase, levied costs do not increase so reduction is in place.
49
CAUV
Must be used for agriculture three years before the reduction is given. Must be renewed annually. Recoupment must be paid on sale.
50
Special assessments
Water lines, streetlights. Bond may be created by County, assessed over 10 year period. Prorated to each property by lineal foot, building size, frontage, acreage, etc. Requires agreement of majority.
51
Tax incremental financing Or TIF
A type of incentive. Bond is created for development.
52
Tax abatement
Incentive to bring jobs to a certain area. Parcels are taxed on land value only. Expires after a certain period of time.
53
Lease renewal
Signing a lease with the existing tenant. Open for renegotiation.
54
Lease
Written or oral contract between the landlord and a tenant that transfers the right to exclusive possession and use of the landlord's real property to the lessee for a specified period of time and for a stated consideration.
55
Types of maintenance
``` Routine Preventative Corrective New Construction Deferred ```
56
Routine maintenance
Regular upkeep and at finding structural and mechanical problems before major repairs are necessary.
57
Preventative maintenance
Program of regularly scheduled maintenance activities and routine inspections of the interior and Exterior of the buildings, equipment, and grounds.
58
Corrective maintenance
Actual repairs necessary to keep a property in good condition and operating smoothly.
59
New construction maintenance
Cosmetic maintenance, Upgrades, finish out, make ready, refurbishing space that is done to increase marketability of the property or entice a new tenants or appease a renewing tenant.
60
Deferred maintenance
Obvious repairs are postponed and I made when needed. Depreciation kicks in. Otherwise known as curable physical depreciation, or curable obsolescence.
61
Monthly operation report
Earning statement itemizing income and expense for the owners property.
62
Flat management fee
Owners want to contain expenses, not increase them. Most commonly used when managing a condominium or cooperative.
63
Percentage fee for management
Expressed as a percentage of the gross collectible income from the property.
64
Cap Rate
Return on investment usually expressed as a percentage. Greater risk, higher cap rate.
65
Alteration
Changing present purpose, function of design.
66
Modernization
Replacing with more streamlined equipment, new style or something better than a replica of the item being replaced.
67
Rehabilitation
Restoration to a satisfactory condition without changing of plan, form, or style. Normal maintenance that has been neglected has been corrected.
68
Budget
A formal statement of income and expense for a given period of time to be used as a guide or outline for that period of time.

RES 1402 - Property Management (1 decks)

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