Chapter 8 Property Management Questions and Answers Graded A

Chapter 8 Property Management Questions and Answers Graded A To whom is a property manager responsible? to the owner and to the tenants of a property. What is the definition of a resident manager? Lives on the property and may be employed by a real estate broker, a managing agent or an owner to manage a property on a part-time or full-time basis. What is the difference btwn a management proposal and a management agreement? A management proposal is submitted to the owner for review before any formal agreement is made. The management agreement is the employment contract for a property manager. How do the owner and the property manager arrive at a management fee? The fee is a negotiated item. It often is a base fee and/or a percentage of the collected rents. What accounting skills are important for a property manager to have? must understanding general accepted account principles (GAAP) and be able to prepare and interpret monthly and yearly reports. What financial skills should a property manager have? must be able to apply the principles of appraisal, finance, money markets, and depreciation techniques to their management of the property. Financial trends and local market conditions. What must a property manager do when establishing a rental schedule? must make a thorough analysis of comparable properties in the neighborhood. What is a rent roll? A list of the # of rental units in a property, the length of each lease (exp date), and the monthly income for each unit. Used to determine the annual rental income for the property. What is a property manager's first responsibility to the owner? to realize the maximum profit on the property that is consistent w/ the owners instructions. What are the three types of budgets that should be established for each project? operating budget- This annual budget includes the income and expenses for ongoing operations. capital reserve budget-A plan to finance long-term outlays, such as for fixed assets like facilities and equipment. It includes variable expenses, for such things as remodeling and capital expenses, such as new equipment. Variable expenses are usually not predictable, but can become a property need at any time stabilized budget-A forecast of income and expenses that can be projected over a short period of time, usually five years. How does preventive maintenance differ from corrective maintenance? doing inspections to prevent having to do corrective What kind of reports should a property manager be giving to the owner? monthly account statements delinquent accounts report detailed annual statement List three skills needed by office building managers. negotiate leases develop competitive rent schedules market to the professions that would make best use of the space enhance or rearrange the space to serve the tenants analyze the local demographics to attract tenants Why is leasing in a retail property critical? Leasing in a retail property is very critical because each of the retailers in a shopping center depends on the traffic that is generated by the other tenants in the center. What tasks do managers of condos, coops and PUDs do that are different from other property managers? They take care of the budgets and collect assessments, coordinate maintenance of the common areas, deal with landscaping and security issues, and enforce the regulations set forth by the association or board of directors. Certified Property Manager© Individuals who meet a certain level of education and experience requirements. Accredited Residential Manager© (ARM©) for resident managers who have a lesser degree of training and on-site experience. Accredited Management Organization© (AMO©) is reserved for companies who meet certain IREM guidelines and employ at least one CPM©. IREM (Institute of Real Estate Management) One of the best known in the field of property management. IREM and BOMA provide both entry-level and continuing professional education for their members and work to enhance the status of professional property managers.