Property Management
Which of the following regarding capital expenditures is MOST accurate? A capital expenditure is a planned expense AND it is considered to be a variable expense. A capital expenditure is an expense paid in order to improve a property AND it is NOT considered to be a variable expense. A capital expenditure is an unplanned expense AND it is considered a variable expense. A capital expenditure is an expense paid in order to improve a property AND it is considered to be a variable expense.
A capital expenditure is an expense paid in order to improve a property AND it is considered to be a variable expense
What is a cash reserve? A cash reserve is a portion of funds allocated to pay for recurring monthly expenses such as insurance and salaries. A cash reserve is a portion of funds allocated to pay for variable expenses. A cash reserve is the money that results from subtracting operating expenses from effective gross income. A cash reserve is a savings account that should not be touched. Its primary purpose is to gain interest for the owner.
A cash reserve is a portion of funds allocated to pay for variable expenses
According to the ECOA, property managers are prohibited from discriminating against which of the following sources of income? child support welfare payments social security payments All of these choices are correct.
All of these choices are correct.
Carl manages a PUD. The property's owner, Carmen, outlined in the management agreement that she wanted to improve her property's tax benefits and wasn't concerned with profits. Instead, Carl prioritizes marketing the property so Carmen can gain more tenant revenue. Did Carl make the right decision? Carl did NOT make the right decision; he should be prioritizing Carmen's primary purpose of improving her property's tax benefits. Carl did make the right decision; as simply a property owner, Carmen does not always know what is best for her property. Carl did make the right decision; increasing profit is always the right move when it comes to property management. Carl did NOT make the right decision; he should be focusing on making the property more sustainable because it is a PUD.
Carl did NOT make the right decision; he should be prioritizing Carmen's primary purpose of improving her property's tax benefits
Dillon manages an office building. Her building has narrow, steep stairs and the elevator is broken. Dillon's property owner does not want to pay to get the elevator fixed and instructs Dillon to leave it. Which of the following is most TRUE? It is likely that Dillon's property does meet ADA standards and her owner is compliant. Dillon and her property owner are still compliant as they have 18 months to comply with ADA regulations. It is likely that Dillon's property does NOT meet ADA standards and her owner can be held liable for non-compliance. Even though the elevator does not work, Dillon and her owner should be fine as long as no current office tenant uses a wheelchair.
It is likely that Dillon's property does NOT meet ADA standards and her owner can be held liable for non-compliance
Susan has seven years of general property management experience. Leonard has four years of commercial property experience and a specialized certification pertaining to commercial property. Analyze which of the following scenarios is MOST TRUE. Susan will always be a more attractive applicant than Leonard because she has a more broad scope of experience. Susan would inspire more confidence in a property owner looking for a property manager to manage a mall. Leonard will always be a less attractive applicant than Susan because he has less experience. Leonard would inspire more confidence in a property owner looking for a property manager to manage a mall.
Leonard would inspire more confidence in a property owner looking for a property manager to manage a mall
Mitchel just got hired as a property manager. On his first day of work his property owner is extremely busy (there was a fire in the unit!) and tells Mitchell they will sign a management agreement in a few months when things calm down. Evaluate this scenario. Mitchel signed a lease with the property owner so he doesn't need to sign a management agreement to establish agency as the owner's property manager. Mitchel should be sure to remind the owner to sign the management agreement as the owner may forget while addressing the unit's fire damage. Mitchel doesn't need to sign a property management agreement with the owner, so this should not make Mitchel concerned. Mitchel should insist they sign a management agreement in order to establish agency. This will allow Mitchel to legally act on the owner's behalf.
Mitchel should insist they sign a management agreement in order to establish agency. This will allow Mitchel to legally act on the owner's behalf.
Which of the following statements is TRUE regarding operating budgets and operating statements? Both operating statements and operating budgets report past expenses. Both operating statements and operating budgets plan for future operating expenses. Operating budgets plan for future operating expenses and operating statements report past expenses. Operating statements plan for future operating expenses and operating budgets report past expenses.
Operating budgets plan for future operating expenses and operating statements report past expenses
Analyze which of the following is MOST accurate: While it is nice to have property management agreements in writing, verbal agreements are just as valid. When deciding if a management agreement should be verbal or written, the property manager should respect their owner's preferences. Property management agreements should ALWAYS be in writing. When deciding if a management agreement should be verbal or written, the property owner should respect their manager's preferences.
Property management agreements should ALWAYS be in writing
All of the following statements are true regarding setting rental rates EXCEPT: Rental rates should be based on area research. Rental rates should always be higher than all comparable properties in the area. Rental rates should yield a high return on the owner's investment. Rental rates should cover a property's operating expenses.
Rental rates should always be higher than all comparable properties in the area
Property managers are responsible for finding and keeping happy tenants. FALSE TRUE
TRUE
Which of the following is TRUE of individual building managers? They are typically in charge of one larger property. They are required to live on the property being managed. They are required to have a real estate license. All of these choices are correct.
They are typically in charge of one larger property.
An REO property is: a bank-owned property gifted from the owner a commercial property managed by multiple private investors a bank-owned property that has been through the foreclosure process a residential property turned commercial through a private investor
a bank-owned property that has been through the foreclosure process
You are the property manager for a new shopping center in a highly populated urban area. You are responsible for selecting an anchor tenant for the center. Which of these should you select? an accounting office a major electronics retail chain a dentist a small local cafe
a major electronics retail chain
What is the difference between a percentage fee and a flat fee? a percentage fee is determined by the property owner whereas a flat fee is NOT a percentage fee does not vary and a flat fee is based on a property's income a percentage fee is based on a property's income and a flat fee does not vary a percentage fee is determined by the property manager whereas a flat fee is NOT
a percentage fee is based on a property's income and a flat fee does not vary
Protecting a property owner's investment and maximizing the owner's return on that investment is: a less important responsibility of a tenant a less important responsibility of a property manager a primary responsibility of a property manager a primary responsibility of a tenant
a primary responsibility of a property manager
A management agreement should convey, in writing: a buyer's rights and responsibilities an agent's rights and responsibilities a tenant's rights and responsibilities a property manager's rights and responsibilities
a property manager's rights and responsibilities
Which of the following is NOT an example of someone who is likely to hire a property manager? a retired agent with a lot of free time who owns one single-family residence rental property a single property owner who owns 75 apartment buildings an accountant who is trying to acquire tenants for his 100-unit apartment building in his spare time a busy owner who owns 100 older properties that require a lot of maintenance attention
a retired agent with a lot of free time who owns one single-family residence rental property
The Uniform Residential Landlord and Tenant Act (URLTA) is: a list of suggestions, but never serves as the basis for law in any states a sample law governing landlord and tenant interactions that has been adopted in full or part by many states an old law that is no longer enforceable a federal law that is mandatory for all 50 states
a sample law governing landlord and tenant interactions that has been adopted in full or part by many states
What area of the contract will inform property managers about the amount of costs they may incur without consulting the owner? allocation of materials allocation of costs reimbursements disbursements
allocation of costs
Jebediah established a very aggressive budget for his property for the coming year. What is a useful tool available to him that could help him measure his aggressive budget against a more tried-and-true budget? capital expense report budget comparison statement operating statement capital reserve budget
budget comparison statement
Josh built an additional bathroom on his property. This is an example of: cosmetic maintenance preventative maintenance corrective maintenance capital improvement
capital improvement
Which of the following are NOT a part of a market analysis? vacancy rates bus schedules construction costs zoning rules
construction costs
A property manager is called by a resident complaining their AC unit has stopped working. What type of property maintenance is this an example of? preventative maintenance routine maintenance appliance maintenance corrective maintenance
corrective maintenance
A fidelity bond is a form of insurance that protects the policyholder by: All of these choices are correct. covering any losses they might incur as a result of theft or fraud by anyone in the general public covering any losses they might incur as the result of theft or fraud by the policyholder covering any losses they might incur as a result of theft or fraud by specified individuals
covering any losses they might incur as a result of theft or fraud by specified individuals
Which of the following is a property manager allowed to consider when selecting tenants for a property? religion credit score familial status national origin
credit score
How is the net operating income determined? potential gross income + operating expenses effective gross income - operating expenses potential gross income - operating expenses effective gross income + operating expenses
effective gross income - operating expenses
Maude is a property manager. She is authorized to manage all of her owner's affairs within certain specified areas, like collecting rent and marketing her property. What type of agent is Maude? secondary agent general agent special agent universal agent
general agent
All of the following can be considered reasonable accommodations according to the Americans with Disabilities Act EXCEPT: adding safety railings to restrooms building a ramp to allow for wheelchair access into a building installing an ice cream machine in the kitchen designating parking spaces for individuals with disabilities
installing an ice cream machine in the kitchen
The lessee is the: party who leases a property party acting as the owner's agent party also known as the lessor party who grants a lease to another
party who leases a property
PUD stands for: planned utility development planned urban development planned unit development planned utilization development
planned unit development
Joel is a property manager. During a more in-depth maintenance check, Joel notices that there is a drip coming from one of the pipes in the maintenance room. He calls a plumber who says Joel is lucky he caught the leak, as the pipe was about to burst. What type of maintenance has Joel conducted? preventative maintenance cosmetic maintenance routine maintenance corrective maintenance
preventative maintenance
Alonso is a new property manager, eager to succeed. He has collected and documented extensive information about his property's rental income and revenue from other sources. He has also documented operating expenses. What tool should Alonso use to help communicate this information to the owner? maintenance report property management report lease contract periodic contract
property management report
A restaurant can be classified as a type of: office property None of these choices is correct. retail property residential property
retail property
"Build-outs" is another name for: appliances that are fixtures tenant improvements tenant damages new home construction
tenant improvements
Whose name will NOT appear on a management agreement? property manager property management firm property owner tenants currently occupying the property
tenants currently occupying the property
The property manager's primary duty is: to maximize the tenant's investment to maximize their own property management fee to minimize the owner's investment to maximize the owner's investment
to maximize the owner's investment
Brokers must have a fidelity bond if they manage community associations with funds: totaling more than $60,000 totaling more than $10,000 totaling less than $60,000 totaling less than $10,000
totaling more than $60,000
Which of the following is a type of residential property? vacation property mall resort bed and breakfast
vacation property
If you spent $1,200 in signage that brought in 30 prospective tenants, what is the cost per prospect? $1,230 per prospect $1,170 per prospect $30 per prospect $40 per prospect
$40 per prospect
