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Real Estate Test 3 > Property Management > Flashcards

Property Management Flashcards

1
Q

What is performed by a property manager?

A 
Maintaining the physical asset
Tenant acquisition
Rent collection
Lease negotiation
Keeping financial records
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2
Q

Types of lease interests

A

Leased fee
Leasehold
Ground lease

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3
Q

Leased fee

A

Landlord, ownership

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4
Q

Leasehold

A

Tenant, holds the space

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5
Q

Ground lease

A

Valuable land gets leased to use, building owner isn’t the same as the land owner

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6
Q

Categories of leasehold estates

A

Tenancy/estate for years (stated)
Periodic tenancy (year to year)
Tenancy at will (lets you stay)
Tenancy by sufferance (evicts)

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7
Q

Residential lease

A

Based on the estate for years leasehold; a contract

less than freehold estate

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8
Q

Tenant selection criteria

A 
Employment stability and earnings adequacy 
Occupancy period expectation
Credit rating
Housekeeping habits
Compatibility characteristics
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9
Q

Is the offer and acceptance similar to real estate sales?

A

No, rental properties aren’t negotiated

Sales involve negotiation and takes longer to close the sale

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10
Q

Consideration

A

Written in the lease: financial asset, rent, rights to the space, real estate

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11
Q

Use by the tenant

A

Can be used for any legal purpose

Limits: pets, grills, hanging pictures, can’t run a business

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12
Q

Tenant’s right to exclude and landlord’s right to enter

A

Renters can exclude most anyone from the property and landlord can enter without asking

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13
Q

When can the landlord enter without asking?

A

Make repairs
Collect unpaid rent
Inspect for waste

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14
Q

Who is usually responsible for repairs?

A

The seller

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15
Q

Liability to third parties

A

If a third party is injured on the property either the landlord or tenant can be held liable

Tenant- if injury is because of damage they didn’t tell the landlord about

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16
Q

**Types of third parties

A

Invitee
Licensee
Trespasser

17
Q

Invitee

A

People that have to come on the property

ex. mailman, utilities

18
Q

Licensee

A

Guests; people you invite on the property

19
Q

Trespasser

A

Someone not wanted/invited on the property

20
Q

Assignment

A

Let the new tenant take over (liabilities and everything)

21
Q

Subletting

A

Original tenant is still liable

22
Q

Ways to terminate a lease

A 
Expiration of the term
Mutual agreement
Merger of leasehold and freehold (buy)
Breach of covenants by tenant or landlord (having pets if not allowed)
Tenant abandonment of property
23
Q

Commercial lease

A

Retail 3-5 years; office 10-15 years; industrial properties
Based on the estate of years leasehold
A contract

24
Q

Rent agreements

A 
Gross rent
Net rent
Percentage rent
Graduated rent
Escalated or indexed rent
25
Q

Gross rent

A

You pay a high rent and the landlord pays operating expenses

26
Q

Net rent

A

You pay a base rent plus property tax, and the tenant pays part of the operating expenses

27
Q

Percentage rent

A

Retail/restaurants
$2 per sq ft base rent + 1% gross sales
(gross sales bc gross profit can be manipulated)

Closer to the anchor (Winn-Dixie) pays more rent because more sales

28
Q

Graduated rent

A

Start at $5/ft and goes up gradually - steps

29
Q

Escalated or indexed rent

A

Rent * CPI (inflation)

Follows the CPI index, landlord would do this to not be tied into a low rent scheme for years

30
Q

Types of net rent arrangements

A

Net rent
Net-net rent
Net-net-net

31
Q

Types of net rent

A

Net rent
Net-net rent
Net-net-net

32
Q

Net-net rent

A

Tenant pays a flat rent to the owner plus the property tax and property insurance

33
Q

Net-net-net

A

Tenant pays flat rent plus entire property tax, property insurance, and CAM (common area maintenance)
*Most common

34
Q

Percentage rent with a minimum

A

Tenant pays a minimum rent (base) with an additional % of the gross sales

Rent = 2% gross sales + min base rent

Real Estate Test 3 (6 decks)

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