Unit 12 Property Management Flashcards

1
Q
Apartment rental rates are usually expressed
A in monthly amounts.
B on a per-room basis.
C in square feet per month.
D in square feet per year.
A

A in monthly amounts.

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2
Q
In preparing for variable expenses in a budget, the property manager should set up
A a control account.
B a floating allocation.
C a cash reserve fund.
D an asset account.
A

C a cash reserve fund.

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3
Q
An important concern in setting rents is
I prevailing rates in the area.
II current vacancy rates.
A I only
B II only
C Both I and II
D Neither I nor II
A

C Both I and II

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4
Q
Which of the following might suggest that rents are too low?
A Poorly maintained building
B Many “For Lease” signs in the area
C High occupancy rate
D High vacancy level
A

C High occupancy rate

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5
Q
Repairing a boiler is classified as which type of maintenance?
A Preventative
B Corrective
C Routine
D Construction
A

B Corrective

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6
Q
In renting units in an apartment building, a property manager must comply with all of the following EXCEPT
A the terms of the management agreement.
B the lawful instructions of the owner.
C fair housing laws.
D the AMA Code of Ethics.
A

D the AMA Code of Ethics.

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7
Q

Generally, the provisions of the management agreement should include all of the following EXCEPT
A a definition of the manager’s responsibilities.
B a listing of previous owners of the property.
C the extent of the manager’s authority as an agent.
D the calculation of management fees.

A

B a listing of previous owners of the property.

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8
Q

When selecting a tenant, consideration should be given to all of the following EXCEPT
A size of the space versus the tenant’s requirements.
B tenant’s ability to pay.
C racial and ethnic background of the tenant.
D compatibility of the tenant’s business with other tenants’ businesses.

A

C racial and ethnic background of the tenant.

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9
Q

A property manager is usually responsible for
I developing a budget and controlling expenses.
II communicating with the owner about physical problems with a building.
A I only
B II only
C Both I and II
D Neither I nor II

A

C Both I and II

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10
Q
When a property manager is establishing rental rates for the building, all of the following should be included as an operating expense EXCEPT
A cleaning supplies.
B management fees.
C debt service payments.
D routine repairs.
A

C debt service payments.

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11
Q

An active real estate license will be needed if the property manager is
A an employee of a partnership that owns the property to be managed.
B part owner of the property.
C an employee of a corporation that owns the property to be managed.
D a general partner of the partnership that owns the property to be managed.

A

A an employee of a partnership that owns the property to be managed.

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12
Q
A property manager who enters into a management agreement with an owner is usually a
A special agent.
B general agent.
C universal agent.
D designated agent.
A

B general agent.

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13
Q
Avoid, control, transfer, or retain are the four alternative techniques of
A tenant relations.
B acquiring insurance.
C risk management.
D property management.
A

C risk management.

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14
Q
Removing existing barriers when readily achievable in public buildings, such as adding Braille markings to elevator buttons, is a requirement of which law?
A North Carolina License Law
B Fair Housing Act
C Equal Credit Opportunity Act
D Americans with Disabilities Act
A

D Americans with Disabilities Act

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15
Q
A semiannual statement sent to an owner that does NOT reflect the entire debt service as an expense is called a(n)
A a cash flow report.
B a profit and loss statement.
C a budget comparison statement.
D an operating budget statement.
A

B a profit and loss statement.

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16
Q
Which of the following would be considered a variable expense when a manager develops an operating budget?
A Employee wages
B Property taxes
C Building repairs
D Basic operating costs
A

C Building repairs

17
Q
A guest slips on an icy apartment building stair and is hospitalized. A claim against the building owner for medical expenses may be paid under which of the following policies held by the owner?
A Workers’ compensation
B Casualty
C Liability
D Fire and hazard
A

C Liability

18
Q
Title III of the Americans with Disabilities Act (ADA) impacts which type of property?
A Residential
B Industrial
C Privately owned
D Commercial and public accommodations
A

D Commercial and public accommodations

19
Q

The primary function of a property manager is to
A generate the highest possible cash flow for the owner.
B preserve the long-term resale value of the property.
C preserve the value of an investment property while generating income.
D create a tax loss for the owner while maintaining resale value.

A

C preserve the value of an investment property while generating income.

20
Q

Property management has become a specialized area of real estate for all of the following reasons EXCEPT
A the increased size of buildings.
B the technical complexities of construction, maintenance, and repair.
C the trend toward absentee ownership by individual investors and investment groups.
D the increased number of tenants ages 21 to 29.

A

D the increased number of tenants ages 21 to 29.

21
Q
Using borrowed funds is also termed
A cash throwoff.
B after-tax cash flow.
C leveraging.
D equity buildup.
A

C leveraging.

22
Q

Cash flow is
A equivalent to operating expense.
B the total amount of spendable income left after expenses.
C the use of borrowed money to finance an investment.
D selling costs plus depreciation.

A

B the total amount of spendable income left after expenses.

23
Q
If the leasing agent gets an 8% commission on rents collected, what would his annual commission be if he leases 20 offices at $750 a month?
A $1,200
B $9,000
C $14,400
D $15,000
A

C $14,400