Lesson 18 - Property Management

Question 1

General Agent

Answer 1

-Someone authorized to transact every kind of business for the principal
(Example: Property Manager).

Question 2

Operating Budget

Answer 2

-An amount of money set aside by the owner for a specific period for the property manager to manage the property effectively.

Question 3

Management Agreement

Answer 3

-A contract between the owner of a property and someone who agrees to manage it.

Question 4

Property Management Report

Answer 4

-An accounting report issued periodically by the property manager to the owner outlining all income and expenditures for that accounting period.

Question 5

Corrective Maintenance

Answer 5

• A maintenance task performed to identify, isolate, and rectify a problem with a property so that the property can be restored to an acceptable condition.
• Example: Fixing a leaky faucet

Question 6

Preventative Maintenance

Answer 6

• Preventative maintenance involves keeping property and equipment in a good state of repair so as to minimize the need for more costly repair work or replacement.
• Example: Changing air filters in AC unit

Question 7

Operating Statement

Answer 7

• The operating statement is used by property managers to project the net operating income for the property.
• The operating statement defines all of the income and expenses for the property.

Question 8

Stabilized Budget

Answer 8

-A stabilized budget is a forecast of income and expenses as may be reasonably projected over a short term, typically five years.

Question 9

Capital Reserve Budget

Answer 9

-Money set aside by a property owner for long-term capital expenditures to a property.

Also known as a replacement reserve.