Chapter 19: Property Management

Question 1

The administration of residential, commercial and/or industrial real estate. Property management typically involves the managing of property that is owned by another party or entity. Property managers are typically paid a fee and/or a percentage of the rent brought in for the property while under management.

• Functions:
• Produce the greatest net return for the owner.
• Protect & increase the owner’s investment.

Answer 1

Property Management

Question 2

A contract between the owner of a property and someone who agrees to manage it.

Answer 2

Management Agreement

Question 3

An individual or company responsible for the day-to-day functioning of a piece of real estate.

Answer 3

Property Manager

Question 4

A manager of a property who lives on-site.

Answer 4

Resident Manager

Question 5

An accounting report issued periodically by the property manager to the owner outlining all income and expenditures for that accounting period.

Answer 5

Property Management Report

Question 6

A key tenant in retail. Typically one of the larger stores in a shopping mall, usually a department store or a major retail chain (Macys, Nordstrom, etc.).

Answer 6

Anchor Stores

Question 7

Expenditures creating future value. Incurred when a property owner spends money to upgrade a building in an effort to add value and/or extend the useful life of the building.

Answer 7

Capital Expense (CAPEX)

Question 8

Money set aside by a property owner for long-term capital expenditures to a property.

Answer 8

Capital Reserve Budget

Question 9

A maintenance task performed to identify, isolate, and rectify a problem with a property so that the property can be restored to an acceptable condition.

Answer 9

Corrective Maintenance

Question 10

A legal proceeding by a lessor landlord to recover possession of real property.

Answer 10

Eviction

Question 11

A person who on behalf of or for the benefit of another transacts business or handles money or property not the person’s own; such relationship implies great confidence and trust.

Answer 11

Fiduciary

Question 12

Someone authorized to transact every kind of business for the principal.

Answer 12

General Agent

Question 13

A person to whom property is rented under a lease.

Answer 13

Lessee

Question 14

One who rents property to another under a lease.

Answer 14

Lessor

Question 15

A document that sets forth the duties of the manager when employed by the owner.

Answer 15

Management Proposal

Question 16

An amount of money set aside by the owner for a specific period for the property manager to manage the property effectively.

Answer 16

Operating Budget

Question 17

A highly designed residential project that features relatively dense clusters of houses, which are usually surrounded by areas of commonly owned open space maintained by a nonprofit community association.

Answer 17

Planned Unit Development

Question 18

Keeping property and equipment in a good state of repair so as to minimize the need for more costly major repair work or replacement.

Answer 18

Preventative Maintenance

Question 19

Controlling and limiting risk in property ownership.

Answer 19

Risk Management

Question 20

A forecast of income and expenses for a property, typically over a three to five year period.

Answer 20

Stabilized Budget

Question 21

A lease for a fixed period of time. For a tenancy for years lease, no notice is needed for termination, the lessee knows the termination date from the outset of the lease.

Answer 21

Tenancy for Years

Question 22

Property expenditures that vary depending of the operations of the property.

Answer 22

Variable Expense

Question 23

What is the total monthly rent roll of a building with the following rents: (1) 3 bedrooms at $4,600/month (8) 2 bedrooms at $3,800/month (8) 1 bedroom at $3,300/month (2) Studios at $2,200/month…?

Answer 23

$65800