Record Keeping Flashcards
1
Q
What types of reports can be derived from the rent roll?
A
Vacancy reports and delinquency reports
Vacancy reports monitor vacancies, while delinquency reports track late payment of rent.
2
Q
What is one practical reason why information is important to decision making?
A
It helps in making informed decisions
Information allows property managers to evaluate performance and strategize effectively.
3
Q
How do standardized procedures and policies generate useful information?
A
They create consistent records and data collection methods
Standardized procedures ensure that all relevant information is captured uniformly.
4
Q
List procedures to control operating expenses.
A
- Budgeting
- Monitoring expenses
- Implementing cost-saving measures
Proper records enhance cost control and decision-making.
5
Q
What is the purpose of a rent roll?
A
To manage a property effectively
A rent roll provides detailed information about tenants and rental income.
6
Q
What information must be compiled for effective vacancy reports?
A
Current vacancies, duration of vacancies, and rental rates
Effective vacancy reports help in assessing market conditions and property performance.
7
Q
What distinguishes the record-keeping needs of commercial properties from office buildings?
A
Different tenant profiles and lease structures
Commercial properties may require more detailed financial tracking compared to office buildings.
8
Q
List procedures for creating a usable audit trail.
A
- Consistent record-keeping
- Documentation of transactions
- Regular audits
An audit trail is necessary for accountability and transparency.
9
Q
True or False: Net operating income (NOI) shows how well a property meets its day-to-day operating expenses.
A
True
NOI indicates the cash available for mortgage payments and improvements.
10
Q
What does NOI highlight about management effectiveness?
A
It shows how well management is controlling expenses and generating income
Increasing NOI is often a goal for property management.
11
Q
Fill in the blank: The higher the ______, the more interest due on borrowed principal.
A
interest rate
Interest rates significantly affect borrowing costs.
12
Q
What is the primary focus of Lesson 3?
A
Record keeping
Lesson 3 emphasizes the importance of record keeping in financial management.
13
Q
Why was record keeping developed?
A
To classify cash inflows and outlays accurately
Merchants, traders, and artisans needed to record transactions as they became complex.
14
Q
How do records enhance financial accuracy?
A
They convert raw data into permanent information
This includes data on rent payments, costs, loans, bills, and paychecks.
15
Q
What is one of the key responsibilities of a site manager?
A
Keeping records of every financial transaction
This is crucial for effective property management.
16
Q
What are two types of records mentioned that help with information management?
A
Paper records and electronic documents
Both types make it easier to maintain and work with information.
17
Q
How do records assist site managers in decision making?
A
They provide vital signs of the property and allow for comparisons over time
This helps in identifying trends and performance differences.
18
Q
What is the role of a site manager in financial information flow?
A
The site manager collects, generates, and uses financial information
This is part of their daily job responsibilities.
19
Q
What financial information does a site manager collect?
A
Rents, receipts of goods and services, and expenses
This information is essential for budgeting and reporting.
20
Q
What is the significance of the chart of accounts?
A
It classifies revenues and expenses
A well-designed chart enhances accuracy and provides useful information.
21
Q
What should the classifications in the chart of accounts reflect?
A
All sources of income and outlays
This ensures that financial information is comprehensive.
22
Q
Fill in the blank: A well-designed chart of accounts enhances _______.
A
accuracy
It produces useful information and reflects the organization of the business.
23
Q
True or False: The site manager’s information is often unreliable.
A
False
Accuracy is paramount in reporting to the owner.
24
Q
What is the significance of the chart of accounts in financial management?
A
It is a system of classifying revenues and expenses, essential for accurate record keeping.
25
Why is planning important for gathering high-quality information?
It ensures that the chart of accounts is well-structured for reliable data collection.
26
What should the classifications in the chart of accounts reflect?
All sources of income and outlays.
27
What is a potential issue with having a broad category like 'Landscape' in the chart of accounts?
It can lead to poor information due to lack of specificity.
28
How should different components within a category like 'Landscape' be handled?
They should be kept separate as each has different functions and expenses.
29
In a multiuse building, how should records for different types of tenants be managed?
Records must be handled separately for stores, offices, and residences.
30
What is the importance of defining line items in the chart of accounts precisely?
It ensures consistency in practices followed by the management team.
31
What should management and accounting agree on regarding revenues and disbursements?
Which kinds can be applied to which accounts.
32
What is the role of standardized procedures in handling information?
They produce better, more manageable information.
33
What should management policies specify regarding delinquent rent?
How to deal with delinquency, including a step-by-step procedure.
34
What is a procedure that should be followed when a tenant delivers signed copies of a lease?
Open a tenant file, forward leases for countersignature, and file the landlord's copy.
35
Fill in the blank: Information is valuable, flexible, and has many _______.
[uses]
36
True or False: Useful information is made more accessible when placed in well-organized forms.
True
37
What responsibilities loom large among site managers regarding financial management?
Controlling operating expenses.
38
What is crucial for site managers to maintain control over operating expenses?
Designing appropriate records and procedures.
39
What is the role of the site manager in eviction proceedings?
Providing a timetable for beginning eviction proceedings and informing the tenant
## Footnote
The site manager must keep copies of notices in the tenant file to document actions taken.
40
What should business practices be set up to provide?
Useful information
## Footnote
Useful information is made more accessible and understandable when organized properly.
41
What is a key responsibility of site managers regarding operating expenses?
To maintain control over those expenses
## Footnote
Site managers should design records to help track expenses effectively.
42
What is the procedure when a tenant delivers signed copies of a lease?
The site manager forwards leases to the authorized staffer for countersignature
## Footnote
A tenant file should be opened for each applicant as part of the policy.
43
What records should the site manager keep regarding day-to-day expenses?
Copies of invoices and budget printouts
## Footnote
These records support financial oversight and expense monitoring.
44
What is the standard procedure for authorizing payment of supplier invoices?
The site manager must initial the invoices before forwarding them to management office
## Footnote
This ensures the site manager oversees operating expenses directly.
45
What must the site manager inspect on each invoice before payment?
Accuracy and completeness
## Footnote
This includes checking account numbers, itemization of goods, and due dates.
46
What information is crucial when inspecting invoices?
Account number, purchase order number, delivery address, delivery date, itemization, payment due date
## Footnote
All this information is essential for accurate record-keeping and transaction documentation.
47
True or False: The site manager should not keep records of transactions.
False
## Footnote
The site manager must keep records to document transactions and monitor costs.
48
Fill in the blank: The site manager's goal is to assess information and gather _______.
All information needed
## Footnote
Proper assessment of information is key to effective property management.
49
What can result from mishandling a lease or bill due date?
Cost real estate management money
## Footnote
Both large documents like leases and minor details like due dates are important.
50
What is the most basic document in real estate management?
The lease
## Footnote
The lease outlines the responsibilities of the landlord and tenant in residential and commercial buildings.
51
What information does the lease provide?
The lease provides information on:
* Unit rented
* Length of lease
* Terms of the relationship
* Amount of rent
* Other agreed-upon charges
* Handling of deposits
52
What should site managers maintain for each tenant?
A separate tenant file
## Footnote
The tenant file should include various important documents related to the lease and tenant information.
53
What key document must be kept in a tenant file?
An executed copy of the lease
## Footnote
This copy must be signed by both the tenant and the landlord.
54
What is a lease summary?
A one-page form that sets out the most important information in the lease
## Footnote
It includes space and area designations and rental information.
55
What are rent roll change instructions used for?
To inform the accounting department of changes in the rent roll
## Footnote
This form should be filled out and sent anytime a change in the lease is made.
56
What types of correspondence should be kept on file?
All correspondence from the tenant's first contact with building management
## Footnote
This helps maintain a comprehensive record of tenant interactions.
57
Why are lease amendments important?
They provide agreed-upon changes to the lease and escalation clauses
## Footnote
This helps avoid misinterpretations and disputes.
58
What information about keys should be recorded?
How the locks are set up on the tenant's doors and what pass keys operate them
59
What records should be kept regarding alterations?
Records of bids, construction, and any bills related to alterations or tenant buildout
60
What miscellaneous items should be included in the tenant file?
Bills incurred for services requested by the tenant
61
What should be included in the tenant file regarding the floor plan?
The most current floor plan, with all alterations
## Footnote
This ensures accurate representation of the space.
62
What is recommended for managing tenant documents in a digital format?
Begin a file on computer to take advantage of storage capabilities
## Footnote
This can include reusable files and backup for paper documents.
63
What is the purpose of a resident ledger?
To maintain individualized records about tenants at residential properties
64
What information should be entered in a resident ledger?
The ledger should include:
* Payments made
* Rent amount and date paid
* Amounts of security and other refundable deposits
* Any amounts past due
* Late charges or other fees
* Details about lease arrangements
* Personal information about each resident
65
What should be included in the file for alterations?
Records of bids, construction, and any miscellaneous billings incurred for services requested by the tenant.
## Footnote
Alterations refer to any modifications made to the property that require documentation for legal and management purposes.
66
What is the purpose of the resident ledger?
To maintain individualized records about tenants at residential properties.
## Footnote
This includes tracking payments, rent amounts, deposits, past dues, late charges, lease details, and personal information.
67
List the key information that should be entered in a resident ledger.
* Payments made
* Rent amount and date paid
* Amounts of security and other refundable deposits
* Any amounts past due from earlier periods
* Late charges or other fees levied and collected
* Details about lease arrangements
* Personal information about each resident
## Footnote
The resident ledger is crucial for effective property management and tenant relations.
68
True or False: The 'paperless office' is likely to exist in the future.
False
## Footnote
Despite advancements in technology, the need for physical documentation remains significant in property management.
69
What should a site manager do to utilize computers in record keeping?
Begin a computer file to take advantage of storage capabilities and keep reusable files like the draft lease for easy access and revision.
## Footnote
Computer files can complement paper files to ensure that important documents are not lost.
70
Fill in the blank: The most current _______ with all alterations should go into the file.
[floor plan]
## Footnote
Keeping an updated floor plan is essential for accurate property management.
71
What information is included in a Lease Summary or Brief?
* Tenant Name
* Building
* Building Address
* Agent
* Firm
* Tenant Number
* Prepared by
* Term
* Commencement
* Terminate
* New or Renewal
* Proposed Occupancy Date
* Actual Occupancy Date
* Commission Percentage
* Lump Sum
* Space and Area Designations
* Rental Information
## Footnote
This summary helps in organizing key lease information for quick reference.
72
What is a tickler system?
A system designed to list deadlines and important tasks by date.
73
How can tickler systems help in a busy office?
They help plan the day by reminding of deadlines, important meetings, and critical dates.
74
What are potential consequences of missing certain deadlines?
Fines, late fees, or other penalties.
75
What are some variations of tickler systems?
Making lists, writing index cards, making calendar notes, using forms in a binder, or using scheduling programs.
76
What is the importance of organizing deadlines in a tickler system?
It helps to prepare for upcoming important dates and meetings.
77
What two basic documents capture information about tenants?
The rent roll and the resident ledger.
78
What information does the rent roll contain?
Basic information about tenants, rent payments, and the status of their units.
79
How is the rent roll different from the resident ledger?
The rent roll lists all units and tenants, while the resident ledger focuses on individual tenant details.
80
What factors should be considered when organizing a rent roll?
Decision making, design of the document, and computer capabilities.
81
Fill in the blank: The rent roll provides a picture of the leasing of the _______.
[whole property]
82
What basic information should be included in a rent roll for a residential building?
* Property name and address
* Tenant name and unit
* Move-in date
* Move-out date (optional)
83
What are the two basic documents that capture information about tenants?
The rent roll and the resident ledger
## Footnote
These documents are essential for managing tenant information effectively.
84
What information does a rent roll typically list?
Basic information about tenants, rent payments, and the status of their units
## Footnote
It serves as a comprehensive overview of the leasing situation for the entire property.
85
How does a rent roll differ from a residential ledger?
A rent roll lists all units and tenants, while a residential ledger tracks individual tenant transactions
## Footnote
This makes the rent roll a more holistic view of the property's leasing status.
86
What should be considered when customizing a rent roll?
Decision making, design of the document, and computer capabilities
## Footnote
Customization ensures the rent roll meets the specific needs of the property and tenants.
87
List five pieces of basic information included in a residential building's rent roll.
* Property name and address
* Tenant name and unit
* Move-in date
* Rent per lease
* Lease beginning and expiration dates
## Footnote
This information helps in tracking tenant details and lease agreements.
88
What additional information can be included in a residential rent roll?
* Move-out date
* Tenant's previous balance
* Miscellaneous charges
* Total amount received
* Security deposit amount
## Footnote
These details provide a complete financial picture related to each tenant.
89
What are the key components of a commercial property's rent roll?
* Property name and address
* Tenant's name
* Tenant's suite, office, or store number
* Square footage leased
* Tenant's rate per square foot
## Footnote
This information helps landlords manage commercial leases effectively.
90
True or False: A rent roll should only include information relevant to residential properties.
False
## Footnote
Rent rolls can be customized for both residential and commercial properties.
91
Fill in the blank: A rent roll is a picture of _______.
[the leasing of the whole property]
## Footnote
It provides an overview of all tenants and units within the property.
92
What is the purpose of including the average rate per square foot in a commercial rent roll?
To compare tenant rates against the property's average rate
## Footnote
This helps in assessing competitiveness and making informed pricing decisions.
93
What are the two basic reports mentioned in record keeping?
Vacancy reports and delinquency reports.
94
What information should be included in a vacancy report?
* Apartment number
* Apartment size
* Rental rate
* Date vacated
* Date ready to show
* Date rented
* Number of days vacant before being rented
95
How often can vacancy reports be sent to the owner?
As often as monthly.
96
What financial effects of vacancies should be summarized in a vacancy report?
* Number of units occupied
* Number of units vacant
* Breakdown of types of units vacant
* Dollar amount of vacancy loss
* Any vacancies for part of the month (number of days vacant)
97
What factors should be covered when filling vacancies?
* Advertising
* Incentives for referrals
* Concessions
* Work undertaken to prepare the unit for a new tenant
98
What is the purpose of a delinquency report?
To report on unpaid amounts due from tenants.
99
What information should be included in a delinquency report?
* Resident's name and apartment
* Scheduled amount due and unpaid
* Any other money due
* Length of the delinquency
* When and how the resident was notified of the delinquency
* Specific efforts to collect the amounts due
* Whether eviction proceedings have begun
100
How frequently should delinquency reports be created and forwarded?
Monthly.
101
Fill in the blank: Vacancy reports are used in determining _______ and rent loss.
vacancy
102
True or False: The length of the delinquency can be for thirty days or longer.
True.
103
What information should be included about each delinquency?
* resident's name and apartment
* scheduled amount due and unpaid
* any other money due
* length of the delinquency
104
What decisions should be recorded in a delinquency report?
* when and how the resident was notified of the delinquency
* specific efforts to collect the amounts due
* whether eviction proceedings have begun
105
What must the delinquency report track closely?
Overdue payments
106
The information in a delinquency report must align with what?
The company's policy and procedure about delinquent rent and eviction proceedings
107
What additional feature may a delinquency report include?
A 'remarks' column for recording comments about the delinquency
108
Fill in the blank: A delinquency report tracks overdue payments and must mesh with the company's _______.
[policy and procedure about delinquent rent]
109
True or False: Eviction proceedings are always recorded in the delinquency report.
True
110
What are the key components of a sample delinquency report?
* Property
* Date
* Occupant
* Date Rent Due
* Amount
* Move-in Date
* Total Amount Delinquent
111
What is a key difference between commercial and residential properties in terms of record keeping?
Commercial properties generate more information and more elaborate records.
112
What types of spaces may inhabit a single commercial property?
* Retail spaces
* Restaurants
* Offices
* Manufacturing
113
Why are commercial leases described as more complicated?
They involve a greater variety of uses and tenants.
114
What software capabilities should be fully utilized in commercial property management?
* Word-processing software
* Databases
* Spreadsheet programs
* Customized software for real estate
* Internet access
115
What should be clear regarding the procedures for sharing information in a commercial property?
It should be clear who begins a document and what other staff members should receive copies.
116
Who is responsible for designing the forms and records used in a company?
The designated staff member or department responsible for forms and records.
117
What is the significance of financial information in a business?
It provides vital signs of the business and serves as a basis for decision making.
118
What are comprehensive records used for in financial management?
* Tracking costs
* Forecasting revenues and expenses
* Showing progress toward financial goals
119
What is an audit trail?
A complete picture of the timing and nature of every financial transaction concerning the property.
120
What is the primary purpose of an audit trail?
To make a company's finances transparent to auditors.
121
Who typically conducts an audit?
An independent third party, usually a certified public accountant.
122
What is the normal reason for conducting an audit?
To enhance the reliability of financial statements put out by a company.
123
What do interested parties such as investors and lenders seek from an auditor's opinion?
Assurance that the company's financial condition is as represented in its financial statements.
124
What should site managers do to produce an effective audit trail?
Keep complete and orderly records.
125
Fill in the blank: Accurate records are the raw material of useful _______.
[budgets]
126
What is the primary value of financial information in a business?
It provides vital signs of the business and serves as a basis for decision making.
127
What can comprehensive financial records be used to track?
Costs, forecast revenues and expenses, and show progress toward financial goals.
128
What is the significance of accurate records in budgeting?
Accurate records are the raw material of useful budgets.
129
What is an audit trail?
A complete picture of the timing and nature of every financial transaction concerning a property.
130
What is the purpose of an audit trail?
To make a company's finances transparent to auditors.
131
Who typically performs audits?
An independent third party, usually a certified public accountant.
132
What is the normal reason for conducting an audit?
To enhance the reliability of financial statements put out by a company.
133
What does an auditor examine to produce an audited statement?
Inventories, assets, and data directly.
134
What does an unqualified auditor's opinion indicate?
The company has passed the audit without issues.
135
What does a qualified auditor's opinion signify?
It is a warning sign to potential lenders and owners.
136
What might lead to a qualified auditor's opinion?
Lack of cooperation from the company being audited, such as poor record keeping.
137
Why do most businesses undergo audits?
To raise their financial credibility with lenders, owners, and other interested parties.
138
What can trigger a less voluntary audit?
Disgruntled owners sending in an auditor to investigate finances.
139
Fill in the blank: Accurate information is needed for _______.
[solid decisions]
140
True or False: An auditor's opinion is irrelevant to investors and lenders.
False
141
How is the site manager central to information gathering and record keeping?
The site manager plays a crucial role in collecting, organizing, and maintaining records relevant to property management.
## Footnote
This includes overseeing tenant files, financial records, and ensuring compliance with regulations.
142
How does the design of the chart of accounts relate to record keeping?
The chart of accounts provides a structured framework for categorizing financial transactions, facilitating accurate record keeping.
## Footnote
It ensures consistency and clarity in financial reporting.
143
What benefits do standardized procedures produce?
Standardized procedures produce benefits such as:
* Consistency in record keeping
* Improved efficiency
* Enhanced accuracy
* Easier training for new staff
* Better compliance with regulations.
## Footnote
These procedures help streamline processes and minimize errors.
144
What information goes into a tenant file?
A tenant file typically includes:
* Tenant application
* Lease agreement
* Payment history
* Communication records
* Maintenance requests.
## Footnote
This information is essential for managing tenant relationships and ensuring compliance.
145
What is a residential ledger?
A residential ledger is a financial record that tracks all transactions related to a specific property, including income and expenses.
## Footnote
It provides a comprehensive view of the property's financial performance.
146
What is the purpose of a rent roll?
The purpose of a rent roll is to provide a detailed list of all tenants, their rental amounts, and payment statuses.
## Footnote
It should be organized by unit number or tenant name for easy reference.
147
What are vacancy and delinquency reports?
Vacancy and delinquency reports provide insights into:
* Current vacancies in the property
* Tenants who are behind on rent payments.
## Footnote
These reports help property managers assess financial health and take necessary actions.
148
What is an audit trail?
An audit trail is a chronological record of all transactions and changes made in financial records.
## Footnote
It is needed to ensure accountability and facilitate audits.
149
Why is an audit trail needed?
An audit trail is needed to ensure accountability, transparency, and facilitate the verification of transactions during audits.
## Footnote
It helps detect errors or fraudulent activities.
150
What is CAM in the context of commercial buildings?
Common-area maintenance fees
## Footnote
CAM is typically part of the lease and based on the square footage occupied by the tenant.
151
What is percentage rent?
Additional rent paid by a tenant when gross sales exceed a certain amount
## Footnote
This amount is also written into the lease.
152
How can a store monitor its percentage rent obligations?
By reporting sales and calculating based on total sales or monitoring sales tax records
## Footnote
Sales tax records are often reliable indicators of total sales.
153
What is the classification of an unpaid bill in accounting?
Accounts receivable
## Footnote
It is considered an asset as it represents money owed.
154
What does the cash flow figure indicate regarding a property?
It shows whether the property meets its major obligations financially
## Footnote
This includes operating expenses, debt service, and capital expenditures.
155
What are the three major types of obligations reflected in cash flow?
* Operating expenses
* Debt service
* Capital expenditures
156
Why is cash flow important for property owners?
It represents the owner's income and financial viability of the property
## Footnote
Owners can decide to reallocate part of cash flow to the property.
157
What is a primary goal for site managers regarding cash flow?
To raise cash flow
## Footnote
This includes monitoring and controlling operating expenses and minimizing vacancy and rent loss.
158
True or False: Debt service is easily altered by site managers.
False
## Footnote
Site managers typically focus on controlling operating expenses instead.
159
Fill in the blank: The bill for services goes into _______ until it is paid.
accounts receivable
160
What does a bottom-line cash flow figure represent?
The overall financial viability of the property
## Footnote
It reflects the property’s ability to meet obligations.
161
What is the classification of a bill held back temporarily?
Accounts payable
## Footnote
Accounts payable are considered liabilities until the bill is paid.
162
When a bill is paid, how is it classified?
Expense
## Footnote
It can be charged to accounts such as 'lighting maintenance' or 'miscellaneous expenses.'
163
Should you charge the tenant for the lightbulbs?
Probably
## Footnote
Lightbulbs are part of restoration costs.
164
What is the security deposit classified as?
Money owed to the tenant
## Footnote
It is not considered revenue.
165
How should salaries be handled in relation to contracts?
Salaries should be kept separate
## Footnote
This applies to supplies paid for directly versus those paid for by contract.
166
What is often a customer service problem when handling delinquent rent?
Keeping communication open between tenant and landlord
## Footnote
Effective communication usually eases rent collection.
167
What should be done if a tenant is late on rent?
Inform the tenant
## Footnote
Use a telephone call, letter, or both, depending on the relationship.
168
Why is it important to have clear office procedures for informing delinquent tenants?
To avoid influencing other tenants
## Footnote
One late tenant can lead to a reputation affecting all tenants.
169
What should be done if a tenant's advertising makes the shopping center look bad?
Set up a meeting between the tenant and the owner
## Footnote
Discuss the tenant's image problem.
170
Can a tenant withhold rent if they have not violated the lease?
Highly unlikely
## Footnote
Leases often require arbitration for legal issues.
171
What should the site manager do if a tenant threatens to file suit?
Inform tenants of ongoing repairs and check local laws
## Footnote
Ensure the tenant knows about clauses in the lease regarding lawsuits.
172
What factors should be considered in decision making regarding rent?
Owner's financial goals, building's market segment, location, economy, competing properties
## Footnote
These factors influence rent and tenant situations.
173
What does the rent roll reflect?
Individual situations of tenants
## Footnote
Includes rent amount, lease length, unit size, and financial information.
174
What is the central repository for basic facts about each tenant and unit?
Rent roll
## Footnote
It serves as the main record for tenant information.
175
What should the manager inform the owner about regarding the law firm?
Conversations with the law firm and attempts to collect the rent
## Footnote
If the law firm seems serious about filing suit, the manager should inform the partners in charge and suggest alternative dispute resolutions.
176
What factors should be considered in decision making for real estate?
Owner's financial goals, building's market segment, location and condition of the building, economy, rises in utilities and taxes, competing properties
## Footnote
Individual rents in residential real estate vary based on apartment size and tenant's length of stay.
177
What does the rent roll reflect?
Individual situations such as amount of rent, length of lease, size and location of unit, pass-throughs, and other financial information
## Footnote
It serves as the central repository for basic facts about each tenant and unit.
178
What updates may be required in a commercial or office building?
Lease summary, rent roll change information, lease amendments, escalation clauses, and rent roll
## Footnote
These updates ensure accuracy in financial records.
179
What is the purpose of discussing the financial goals of the owner?
To spark consideration and discussion on how to maintain financial objectives
## Footnote
It emphasizes the importance of structured decision-making in property management.
180
How many total vacant units are mentioned?
Fifteen total vacant units
## Footnote
This figure helps assess the occupancy level of the property.
181
What is the vacancy loss for one-bedroom apartments calculated as?
9 × $475 = $4,275
## Footnote
This calculation indicates the financial impact of vacancies on rental income.
182
What might a site manager want to inspect in apartments?
To ensure they are up to date and competitive
## Footnote
This is important for attracting new tenants.
183
What advertising focus may be beneficial for one-bedroom apartments?
Publications appealing to single persons and younger couples
## Footnote
These demographics are natural markets for such units.
184
How is rent usually calculated in retail real estate?
Based on square footage of the retail space
## Footnote
This differs from residential real estate where square footage and rent are not as directly tied.
185
What additional conditions are typically included in a retail lease?
Common-area maintenance, taxes, insurance, and management fees
## Footnote
These can all be passed through pro rata.
186
What are breakpoints in a retail lease?
A tenant agrees to pay a percentage of gross sales after reaching a certain level of cash flow
## Footnote
This clause is unique to retail leases.
187
True or False: The charge for retail space is related to the percentage of total square footage rented.
True
## Footnote
This indicates the direct correlation between rent and space rented.
188
What factors influence rent variability in retail spaces?
Tenant's business type, sales as cash flow, tenant's needs, willingness to provide services for its own space
## Footnote
These factors contribute to the complexity of rental agreements in commercial real estate.
189
What is a key market for one-bedroom apartments?
Single persons and younger couples.
190
What may rent concessions indicate to prospective tenants?
That the building has problems.
191
What should site managers do regarding rent concessions?
Check the competition's advertisements and price breaks.
192
How is rent usually calculated in retail real estate?
Based on square footage of the retail space.
193
How does rent calculation differ in residential real estate?
Square footage and rent are not tied as directly.
194
What does the rent calculation for retail involve?
A multiplier and square footage.
195
What additional costs can be passed through in a retail lease?
* Common-area maintenance
* Taxes
* Insurance
* Management fees
196
What are breakpoints in a retail lease?
The tenant agrees to pay a percentage of gross sales after reaching a certain cash flow level.
197
Is there a comparable charge at a residential rental building?
No.
198
What factors influence rent variations?
* The business the tenant is in
* Tenant's sales or cash flow
* Tenant's needs
* Tenant's negotiating skills
199
What do records do for financial information?
Make it more manageable and retrievable.
200
Why is a well-planned chart of accounts important?
It is central to record keeping and classifies all financial records.
201
What should the classifications in a chart of accounts reflect?
All sources of income and outlays.
202
How does the chart of accounts enhance accuracy?
By producing useful records and reflecting the organization of the business.
203
What is necessary for standardized procedures at a property?
Precise definitions of line items in the chart of accounts.
204
What does the lease document describe?
The landlord's and tenant's responsibilities and actions.
205
Why can the lease be considered the key document in real estate?
It is a binding contract and the basis of the landlord-tenant relationship.
206
What information can be found in a lease?
* Unit rented
* Length of lease
* Terms of the relationship
* Amount of rent
* Other agreed-upon charges
* Handling of deposits
207
In what ways do records make information about finances more manageable?
Records improve accuracy, make information retrievable, and enhance accessibility
## Footnote
Accuracy is crucial for decision-making, and records convert raw data into permanent information.
208
Why is a well-organized chart of accounts important for record keeping?
It is central to record keeping, reflecting all sources of income and outlays
## Footnote
A comprehensive chart of accounts enhances accuracy, produces useful records, and organizes financial activity.
209
How does the chart of accounts help produce standardization of procedures?
It requires precise definitions for line items and agreement on revenue and disbursement classifications
## Footnote
Standardized use of the chart leads to uniform financial practices across the management team.
210
Why can the lease be considered the key document in real estate?
It outlines the responsibilities of landlords and tenants and is a binding contract
## Footnote
The lease contains essential information like unit rented, lease length, rent amount, and related charges.
211
What is a tickler system?
A management tool that lists deadlines and important tasks by date
## Footnote
It helps site managers plan work and avoid late fees or penalties.
212
Why are vacancy reports and delinquency reports considered 'basic' reports?
They organize information about rent, the main source of income, and derive from key records
## Footnote
These reports help monitor daily operations and track income-producing transactions.
213
Fill in the blank: The chart of accounts is the ______ for all financial records.
clearing house
214
True or False: A well-designed chart of accounts can enhance accuracy and produce useful records.
True
215
Fill in the blank: A tickler system allows a site manager to check ______ on a daily basis.
deadlines
216
List three types of information contained in a lease.
* Unit rented
* Length of lease
* Amount of rent
217
What is the primary purpose of vacancy and delinquency reports?
To monitor day-to-day operations and track rent-related income
## Footnote
These reports are typically compiled monthly and are crucial for financial oversight.
218
What are the four areas of information gathering and record keeping that the site manager is instrumental in?
Collecting rents, verifying receipt of goods and services, preparing the annual operating budget, maintaining records on marketing trends, delinquency rates, tenant turnovers, competing properties, and maintenance.
## Footnote
This information is included in reports to the owner.
219
What is the central document in financial record keeping?
The chart of accounts.
## Footnote
It reflects all sources of income and outlays.
220
What should the classifications on the chart of accounts reflect?
All sources of income and outlays.
## Footnote
It should be customized to the specific kind of business.
221
What are the benefits of standardized forms and procedures in record keeping?
Produce better information, manage results, ease decision making, repeatability, and ease of teaching.
## Footnote
They are documented in standard operating procedure manuals.
222
What information and documents should a tenant file contain?
Executed copy of the lease, lease summary, rent roll change instructions, correspondence, lease amendments, escalation information, key information, alterations to the lease, miscellaneous billings, and a copy of the floor plan.
## Footnote
This ensures comprehensive tenant management.
223
What information does the resident ledger include?
Payments made, rent amount and date paid, security deposits, amounts past due, late charges, lease arrangements, and personal information about each resident.
## Footnote
This is crucial for tracking tenant finances.
224
What is a rent roll?
A listing of basic information about tenants, rent payments, and the status of their units.
## Footnote
It should be customized to the types of buildings and tenants.
225
What does a vacancy report summarize?
Which apartments are vacant, measures taken to fill them, financial effects of vacancies, and actions taken.
## Footnote
It can be sent to the owner monthly.
226
What should delinquency reports include?
Basic data about delinquent tenants, amounts owed, and decisions made to correct the delinquency.
## Footnote
These reports should also be forwarded monthly to the owner.
227
What is an audit trail?
A complete picture of the timing and nature of every financial transaction concerning the property.
## Footnote
It is essential for maintaining financial transparency for auditors.
228
What is the purpose of an audit trail?
To make a company's finances transparent to auditors and enhance the reliability of financial statements.
## Footnote
An auditor's opinion on these statements holds significant weight.
229
What should site managers keep for a clear audit trail?
Complete and orderly records of all transactions affecting their properties.
## Footnote
This is crucial for the audit process.
