PROPERTY MANAGER AND OWNER RELATIONSHIPS Flashcards
(17 cards)
PARTIES TO A MANAGEMENT AGREEMENT (3)
- PRINCIPAL-OWNER-CLIENT
- SPECIAL AGENT-PMIC-BIC-AGENT
- GENERAL AGENT-PM
LAW OF AGENCY
COVERS RELATIONSHIP BETWEEN 3 PARTIES
ESSENTIAL ELEMENTS OF MANAGEMENT AGREEMENTS (4)
- IDENTIFICATION OF THE PARTIES
- CONTRACT PERIOD
*DEFINITE START AND END DATE - MANAGER’S RESPONSIBIITIES
I) MONTHLY REPORT’S AND DISBURSEMENTS
II) POWERS FOR RENTING, OPERATING, AND MANAGING - OWNERS RESPONSIBILITIES
*MAINTAIN INSURANCE
FIDUCIARY RESPONSIBILITIES (6)
- OBEDIENCE
- LOYALTY
- DISCLOSURE
- CARE, KNOWLEDGE, AND DUE DILIGENCE
- ACCOUNTING
- CONFIDENTIALITY
MANAGEMENT PLANNING (3)
- ECONOMIC FACTORS
- ANALYSIS OF OWNER’S OBJECTIVES
- PREPARATION OF MANAGEMENT PLAN
ECONOMIC FACTORS (5)
- NEIGHBORHOOD AND REGIONAL MARKET ANALYSES
- RENTAL PRICE
- PROPERTY ANALYSIS/APPRAISAL
- EVALUATION OF COMPARABLES
- MARKET VALUE
NEIGHBORHOOD MARKET ANALYSIS
- WILL INCLUDE ALL INFORMATION PERTAINING TO THE RENTALS IN THE NEIGHBORHOOD
- SHOULD ASSESS HIGHEST AND BEST USE FOR THE PROPERTY
- FACTORS TO CONSIDER ARE LAND USAGE, SUPPLY AND DEMAND, NEIGHBORHOOD AMENITIES AND FACILITIES
REGIONAL MARKEY ANALYSIS
- WILL INCLUDE ALL DEMOGRAPHIC AND ECONOMIC INFORMATION
- SHOULD INCLUDE POPULATION, EMPLOYMENT OPPORTUNITIES, INCOME POTENTIAL, AND FUTURE KNOWN PLANS
- SHOULD BE UPDATED YEARLY
RENTAL PRICE
FINAL RESULTS OF REGIONAL AND NEIGHBORHOOD MARKET ANALYSIS
PROPERTY ANALYSIS/APPRAISAL CONSIDERATIONS (8)
- POTENTIAL RENTAL INCOME
- OPERATING COSTS
- LEASES
- QUANTITY AND QUALITY OF SPACE
- PHYSICAL CONDITION OF INTERIOR AND EXTERIOR PREMISES
- EQUIPMENT
- HEALTH AND SAFETY HAZARDS
- COMPETITION
PREPARATION OF MANAGEMENT PLAN (5)
- PURPOSE
- OPERATING BUDGET
- FIVE-YEAR FORECAST
- COMPARATIVE INCOME AND EXPENSE ANALYSIS
- POLICIES AND PROCEDURES
OPERATING BUDGET (9)
- ESTABLISH OPTIMUM RENTS
- DETERMINE GROSS ANNUAL SCHEDULED RENTAL INCOME
- ADJUST TO REFLECT ANTICIPATED MARKET TRENDS
- FISCAL YEAR
- CALCULATE YEARLY OPERATING COSTS
- ESTABLISH NECESSARY RESERVE FUNDS
- DEBT SERVICE
- REVIEW CASH FLOW
- NET OPERATING INCOME
MARKET TREND ADJUSTMENTS
- UNTIL FACTUAL DATA IS KNOWN, PM SHOULD ASSUME 5% VACANCY
- PM SHOULD REDUCE THE POTENTIAL GPI BY THE VACANCY RATE EVERY FISCAL YEAR
CALCULATING YEARLY OPERATING COSTS
- ESTABLISH NECESSARY RESERVE FUNDS
- DEBT SERVICE
- REVIEW CASH FLOW (NOI)
RESERVE FUNDS
TYPICALLY 10-15% OF THE TOTAL COST SHOULD BE MAINTAINED IN RESERVE FOR EMERGENCIES AND UNFORESEEN ISSUES
DEBT SERVICE
CASH REQUIRED OVER A GIVEN PERIOD FOR THE REPAYMENT OF INTEREST AND PRINCIPAL ON A DEBT
CASH FLOW (NOI)
MONIES LEFT OVER AFTER COLLECTING ALL RENTS AND PAYING THE BILLS
