Real Estate Exam - Chapter 17: Property Management

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Real Estate Exam - Chapter 17: Property Management

Real Estate Exam - Chapter 17: Property Management

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A Property Manager must:
- Achieve goals of the owners
- Generate income for owners
- Presence and Increase value of the property
Property management begins with a: Managment Plan
Enter into a Management Agreement (contract)
Prop manager is a general agent
Financial Reports:
Operating budget - gives owner sense of profit to expect during a certain period
Cash Flow Report - Monthly statement of all financial status (income, expenses, etc) **Look at Cash Flow formula notes
Profit and Loss statement: general picture, not itemized **Look at Formula
Renting the Property & Setting Rental Rates:
When occupansy level of an apt house / building exceeds 95%, should consider raising rents.
- Calculate rent based on square footage (for commercial) **Formula
Maintaining property: 4 types
- Preventative (painting, applicance servicing)
- Repair or Corrective
- Routine (day-to-day i.e. cleaning)
- Construction / build-outs (to meet a tenant's needs)
Federal laws affecting property management:

ADA - existing barriers must be removed if can be in a readily achievable manner
ECOA - can discriminate on credit only. Must do same for all.
FHA - also Blockbusting and Steering are prohibited when trying to attract tenants
Risk Management techniques: ACTOR
Avoid - Remove source of risk (i.e. pool)
Control - Prepare i.e. put in sprinklers, cameras
Transfer - Shift risk i.e. Insurance
Retain - Keep i.e. chance of event are too small
Surety Bonds:

Multiperil Policies
- Type of insurance covering owner over financial losses caused by an employee's criminal acts