Chapter 3 - Property Management

What is included in the Property Management Agreement?

It is between the owner of the property and the broker. Must have a description of the property (address/legal description) The agreement must be in writing - spelling out compensation, responsibilities, goals, length of the agreement, etc Normally involves a general agency (ongoing specific services)

NOT Normally responsibilities of a property manager

Major repairs Selling the Property Major Additions Appraising

Property managers budgets often address what

Operating expenses Maintenance and repairs Utilities

A rental property manager's agreement allowed him to perform normal maintenance and repairs. He would have to obtain the owners permission to do which of the following? Repair the elevator Renovate a unit for a tenant Paint the outside trim Fix a broken window

Renovate a unit for a tenant

Responsibilities of a Property Manager include

Securing suitable tenants Collecting rent (economic rent) Overseeing the care of the property Budgeting Hiring and supervising employees Keeping records Making reports to the owner Maximizing Profits

You become a property manager for an apartment complex. The owner doesn't want you to tell any applicants certain information. What must you tell the applicant? The racial mixture of the complex The appraised cost of the building That they are going to remove the pool in the near future That there is a recovering alcoholic living there

That they are going to remove the pool in the near future

In a typical property management agreement, which would not be included? The property managers salary The allowable vacancy rate The property managers functions A description of the property

The allowable vacancy rate

Which best describes the term "economic rent"? The rent currently being paid The total rent left to collect over the term of the lease The rent that real estate can demand under the current market The total rent paid to this point in the lease

The rent that real estate can demand under the current market

Which is the most important for a broker, acting as a property manager, to accomplish? To keep the buildinng 100% occupied To get the maximum profit possible in accordance with the goals of the owner To keep down the cost To keep the tenants satisfied

To get the maximum profit possible in accordance with the goals of the owner

Which of the following is not considered an operating cost in property management? Lawn maintenance and snow removal Repairs Vacancy and lost rent Utilities

Vacancy and lost rent

As part of his duties, a property manager should develop a rent schedule based upon all of the following except Market rent the current level of the premises available the rental history of the premises his own person needs

his own personal needs

A property manager of a large apartment complex has a policy of changing the furnace filters on a regular basis. This is referred to as what? corrective maintenance constructive maintenance regular maintenance preventative maintenance

preventative maintenance

Duties of a property manager include all of the following except renting space to tenants repairing a tenant's fixture developing a management plan preparing a budget

repairing a tenant's fixture

A property manager was hired for seven years. Considering a gross income of $60000 per year, he was to receive a 6% commission on the first year, 5% on years two and three and 3% over the rest of the term. How much did he collect? 13800 15000 16800 18600

16800

The owner is to receive a minimum monthly rent of $600 plus 5% gross annual sales. If gross sales were $200,000, what was the total paid? 7200 17200 10000 10600

17200

A property manager might be hired to manage what?

An apartment complex A commercial shopping mall A condominium complex

You are hired to manage an apartment complex bu the owner. Through rumors you suspect a tenant is using or selling illegal drugs. What should you do? Call the owners of the complex and make him aware of the situation Take accurate notes and document all of the events you become aware of Ask the other tenants if they know if the tenant is using or selling drugs Nothing, it is not your apartment

Call the owners of the complex and make him aware of the situation