Unit 19: Property Management

Question 1

A property manager, whether an individual or a company, acts as the _______ agent of the investment property owner in administering the property to achieve the objectives of the owner, generate ______, and preserve and/or increase the property’s _____.

Answer 1

general, income, value

Question 2

Property management functions may require a real estate or property management _______, as provided by state law.

Answer 2

license

Question 3

A leasing agent is usually a state-licensed real estate professional working as an independent contractor or property manager on a __________ basis.

Answer 3

commission

Question 4

A corporate property manager is usually an ________ of the corporation.

Answer 4

employee

Question 5

A management ____ and management __________ should define the expectations and responsibilities of the parties.

Answer 5

plan, agreement

Question 6

A ____ ____ report will summarize income and expenses.

Answer 6

cash flow

Question 7

Periodic ______ and ____ statements provide general financial information. ___ profit is determined by computing gross receipts, then subtracting operating expenses and interest paid on a mortgage loan. A ______ __________ statement compares actual results with the original budget.

Answer 7

profit and loss, Net, budget comparison

Question 8

Rents typically are determined at a monthly rate per unit for ___________ property and at a monthly rate per square foot for __________ property.

Answer 8

residential, commercial

Question 9

A building manager selects _______ while complying with all applicable federal, state, and local fair housing, antidiscrimination, and equal opportunity laws.

Answer 9

tenants

Question 10

Commercial tenant considerations typically include the ___________ of the building in terms of size, location, and amenities; _____________ of the prospective tenant with the building and other tenants; and the ____________ of space for expansion, if necessary.

Answer 10

suitability, compatibility, availability

Question 11

Adequate property maintenance includes __________ maintenance, timely _______ or corrective actions, and the routine activities that help ________ the property and enhance its desirability to tenants.

Answer 11

preventive, repairs, preserve

Question 12

The environmental concerns that require the attention of the property manager include the disposal of _________ ______, the lead-based paint disclosure for residential property constructed before ____, ________-_______ illness (BRI), and ____ ________ syndrome (SBS).

Answer 12

hazardous waste, 1978, building-related, sick building

Question 13

Federal laws affecting property management include the following:

1. Americans with Disabilities Act (ADA), which includes
   Title I, which applies to employers with __ or more employees and provides for employment of qualified job applicants, regardless of disability, with reasonable accommodations;
2. Title III, which prohibits discrimination in __________ properties and public accommodations and requires that access to facilities and services be provided when reasonably achievable in existing buildings, with a higher standard for new construction or remodeling;
3. _____ ______ ___________ Act (ECOA), which prohibits lenders from denying a loan based on a person’s race, color, religion, national origin, sex, marital status, age, or receipt of public assistance; additional protections may be added by state or local laws;
4. F______ F___ H______ A__, which prohibits discrimination in the sale, rental, or financing of housing based on race, color, religion, national origin, sex, familial status, or disability; additional protected individuals may be added by state or local laws

Answer 13

15, commercial, Equal Credit Opportunity, Federal Fair Housing Act

Question 14

Risk management includes treatment of risk by deciding whether to a____ it, c______ it, t_______ it, or r_____ it (ACTOR) and focuses on tenant security and types of insurance available. The renter’s insurance policy that covers the renter’s personal property is the __-_ policy.

Answer 14

avoid it, control it, transfer it, or retain it; HO-4

Question 15

In preparing a management plan, a property manager analyzes three factors: the owner’s __________, the regional and neighborhood ______, and the specific ________. Occupancy, __________ rates, and new starts are critical indicators.

Answer 15

objectives, market, property, absorption

Question 16

The ____ ____ report is the most important financial report because it provides a picture of the current financial status of a property.

Answer 16

cash flow

Question 17

gross rental income + other income – losses incurred = _____ income

total income – operating expenses = ___ operating income

net operating income – debt service – ________ = cash flow

Answer 17

total, net, reserves

Question 18

_____ receipts – operating expenses – total mortgage payment + ________ ____ principal = net profit

Answer 18

gross, mortgage loan

Question 19

Property marketing expenses are usually figured on a ____-per-________-per-_____ basis.

Answer 19

cost-per-prospect-per-lease

Question 20

Fair housing laws do not apply to __________ properties

Answer 20

commercial

Question 21

A commercial or industrial property manager often is called on to make ______ improvements (or build-outs). These are construction ___________ to the interior of the building to meet a tenant’s particular space needs.

Answer 21

tenant, alterations

Question 22

As with homeowners insurance policies, commercial policies include ___________ clauses that require the insured to carry fire coverage, usually in an amount equal to __% of a building’s replacement value.

Answer 22

coinsurance, 80

Question 23

T/F: Property managers may want to carry errors and omissions (E&O) insurance to protect against any financial management mistakes.

Answer 23

True. E&O insurance can protect the property manager against any financial management mistakes; however, the E&O policy will exclude the coverage for certain losses, such as those brought about by fraud.