Dc Pm Exam Study Guide

sublet/sublease agreement - Answer-a lease agreement between a tenant a sub-tenant where the original tenant essentially becomes a middle-man between the landlord and the subtenant assumes both landlord duties to the sub-tenant and tenant duties to the landlord management plan - Answer-describes in detail the subject property''s current use along with its physical condition, fiscal projections and any operational issues analysis of alternatives - Answer-rehabilitate the property w/out altering its existing use, modernize the property by updating finishes etc., changes the use of the building or demolish for new development, conversion to condos Physical Obsolescence - Answer-a condition of aging or deferred maintenance ex) worn carpets, dead landscaping functional obsolescence - Answer-old or outdated designs or building system's ex) equipment that is not repairable b/c parts are no longer made Economic Obsolescence - Answer-loss in value due to outside forces gross potential rental income - Answer-max amount of income that a property can generate from all sources. represents the total potential income from all units/spaces being fully occupied and all amounts owed by residents/tenants being collected in full pass through income, expense reimbursements, or recovers - Answer-when tenants are billed for some or all of the property's operating expenses. owner will be reimbursed for some or all of the property's operating expenses ex.) reimbursements for utilities landscaping, etc. Effective Gross Income - Answer-gross potential rental income + expenses reimbursements - vacant and credit loss + misc income operating expenses - Answer-all of the costs associated with running and maintaining a property ex) real estate taxes, insurance, snow removal commercial property operating expenses - Answer-frequently calculated and referred to based on a dollars and cents per square foot basis ex.) if a commercial property is 100,000 sf and its annual electricity costs are $225,000 what is electricity cost per square foot? Net Operating Income (NOI) - Answer-The income projected for an income-producing property after deducting losses for vacancy and collection and operating expenses.