Chapter 12 Flashcards
(17 cards)
This agreement creates agency relationship between the owner and the property manager
Property management agreement
Someone who preserves the value of an investment property while generating income as an agent to for the owner
Property manager
Property management begins with the management plan prepared by the property manager (3)
1) the owner’s objectives
2) the regional and neighborhood market analysis
3) the specific property analysis
A monthly statement that details the financial status of property
Cash flow report
The amount of rental income the property could produce with a 100 percent occupancy with all tenants paying rent ; also called schedule gross income
Potential gross income
The amount of income lost due to empty units or tenants not paying full rent
Vacancy and collection losses
The anticipated income from rental property resulting from potential gross income minus an allowance for vacancy and bad debts
Effective gross income
The net spendable income from an investment determined by deducting all operating and fixed expenses from the gross income when expenses exceed income a negative _____ results
Cash flow
Periodic and necessary expenses essential to the continuous operation and maintenance of an income property
Operating expenses
A financial picture of the revenues and expenses used to determine whether the business has made money or suffered a loss
Profit and loss statement
Compares the actual results with the original budget often given either percentages or a numerical variance of actual versus projected income and expenses
Budget comparison statement
The statement of proposed rental rates determined by the owner or property manager or both based on a building’s estimated expenses market supply and demand and the owners long-range goals for the property
Rental schedule
Helps prevent problems and expenses
Preventive maintenance
Corrects problems after they’ve occurred
Corrective maintenance
Property maintenance encompasses what 4 areas?
1) preventive maintenance
2) repair or corrective maintenance
3) routine maintenance and cleaning
4) construction
4 steps to handling risk?
Avoid it
Retain it
Control it
Transfer it
The income projected for an income producing property after deducting losses from vacancy and collection and operating expense
Net operating income