Lesson 4: Property Management Flashcards
What is “property management”?
Property management involves operating, controlling, and overseeing real estate. This includes managing property owned by another entity or person to ensure it’s maintained, occupied, and its value is preserved or increased.
Define “lease agreement”.
A lease agreement is a contract between a landlord and a tenant that specifies the terms and conditions under which the tenant can rent property from the landlord, such as duration of the lease, rent amount, and maintenance responsibilities.
What are “tenant screening” procedures?
Tenant screening involves evaluating prospective tenants’ applications, checking their credit scores, criminal background, rental history, and employment to assess their ability to fulfill lease obligations.
Explain “building maintenance”.
Building maintenance includes all activities necessary to keep a property’s structure, utilities, and amenities in optimal condition, involving routine checks and fixing issues like plumbing, heating, and electrical systems.
What does “vacancy rate” indicate in property management?
Vacancy rate is a critical metric that shows the percentage of all available units in a rental property that are vacant or unoccupied at a particular time.
Define “rent collection”.
Rent collection is the process of gathering rental payments from tenants on behalf of the landlord as per the terms outlined in the lease agreement.
What is a “security deposit”?
A security deposit is a sum of money held by the landlord during the lease term to ensure that the tenant adheres to the terms of the lease and to cover damages to the property if necessary.
Explain the purpose of “property inspections”.
Property inspections are conducted to assess the condition of a property at various stages, such as before a tenant moves in, periodically during the tenancy, and after the tenant moves out to ensure the property is well-maintained.
What is “eviction”?
Eviction is the legal process by which a landlord may remove a tenant from rental property for reasons such as non-payment of rent or violation of lease terms.
Define “operating budget” in property management.
An operating budget for property management outlines the projected income and expenses for a property over a specific period, helping property managers ensure financial goals are met.
What is “capital expenditure”?
Capital expenditure refers to funds used by a company to acquire, upgrade, and maintain physical assets such as property or equipment. In property management, this often involves significant expenses for improvements that extend the life of the property.
Explain “asset management” versus “property management”.
Asset management focuses on maximizing property value for investment purposes, often dealing with buying, selling, and development strategy. Property management focuses on day-to-day operations and maintenance of the property.
What are “common area maintenance” (CAM) charges?
CAM charges refer to the fees tenants pay to maintain common areas of a property shared by more than one tenant, such as lobbies, parking lots, and landscaping.
Define “turnover rate”.
Turnover rate in property management refers to the rate at which rental units become vacant and then are re-rented to new tenants. A high turnover rate may indicate dissatisfaction or pricing issues.
What does “lease renewal” involve?
Lease renewal involves extending the lease agreement with an existing tenant, typically involving renegotiation of terms such as rent, duration, and property use.
Explain “risk management” in property management.
Risk management involves identifying, evaluating, and taking preventive measures to reduce risks associated with property ownership, such as ensuring proper insurance coverage and safety compliance.
What is a “property manager”?
A property manager is a third party who is hired to handle the daily operations of a real estate investment, from screening tenants, collecting rent, handling maintenance, and possibly managing staff and contractors.
Define “real estate asset manager”.
A real estate asset manager focuses on maximizing a property’s value for investment purposes, managing a property portfolio strategically to achieve long-term financial objectives.
What is “tenant retention”?
Tenant retention refers to strategies employed by property managers to keep existing tenants happy and renewing their leases, which helps maintain consistent rental income and reduce vacancy rates.
Explain “market rent analysis”.
Market rent analysis involves evaluating the rental rates of comparable properties in the area to determine competitive rent prices for a property to attract and retain tenants.
What are “leasing commissions”?
Leasing commissions are fees paid to real estate agents or brokers for securing tenants for rental properties, usually a percentage of the lease value or a flat fee.
Define “preventive maintenance”.
Preventive maintenance involves regularly scheduled inspections and maintenance tasks to keep property equipment and systems functioning efficiently, aiming to prevent breakdowns and extend their lifespan.
What is a “maintenance request”?
A maintenance request is a formal request by tenants for repairs or maintenance on the rental property, which the property manager must address within a reasonable timeframe to maintain tenant satisfaction and property condition.
Define “full-service lease”.
A full-service lease, often used in commercial properties, includes all operating expenses related to the property, such as utilities, taxes, and maintenance in the rental price.
