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Definition
| the administration of rental or other property by a person or a team of people who are acting for the owner. The management of the property is done for a fee. |
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| true or false: A property manager has a dual responsibility – to the owner and to the tenants of a property. He or she must understand that the owner is interested in the highest return from the property and the tenants want the best value for their money, including space that is properly maintained. |
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Definition
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Term
true or false: According to real estate law in many states, a property manager does not need a real estate license when the property manager or management company performs real-estate-related tasks, such as collecting rent for one owner who is paying the manager a salary.
If the person or company is working for more than one owner, that person or company should have a real estate license. Persons working for such a management company should have a sales associate's license so they can collect the rent and perform other real estate tasks. |
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Definition
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| individual property manager |
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Definition
| is usually a real estate broker who manages properties for one owner or a number of owners. Such a manager may be a member of a small property management firm devoted to full time property management, he or she may be a self-employed manager, or he or she may be one of several managers in a large real estate firm. |
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| individual building manager |
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Definition
| usually manages a single large property. This manager may be employed by a property manager or directly by an owner and may or may not have a real estate license. |
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Term
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Definition
| 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. |
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Term
| real estate asset manager |
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Definition
| acts as the property owners' agent and adviser for the property. He or she plans and directs the purchase, development, and disposition of real estate on behalf of the business and investors. A real estate asset manager focuses on long-term strategic financial planning rather than on day-to-day operations of the property. |
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Term
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Definition
Before entering into a formal agreement, a property manager will submit a management proposal to the property owner. A proposal would include such things as:
A description of the property, including the land and all improvements
A list of what maintenance will be required
Information about how maintenance records will be kept
Information regarding the accounting procedures the manager will use
A schedule of property inspections
Several proposed budgets – operating budget, capital improvement budget, stabilized budget
Information about the proposed management fee |
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Term
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Definition
| is the employment contract for a property manager. The owner is the principal and the property manager is the agent in this agreement, which creates a general agency between the parties. As such, the property manager owes fiduciary duties to the owner. |
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Definition
| This section deals with what authority the manager has with regard to such things as hiring and firing employees, setting the rental rates, and authorizing repairs. |
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| Accounting Responsibilities |
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Definition
| This should include details on how security deposits, rents and expenditures must be handled. All funds collected on behalf of the owner are to be held in a trust account and only those expenditures outlined in the property management budget can be paid from this account. Security deposits must be handled in accordance with government regulations. |
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Term
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Definition
in which an owner is liable for an injury to a person or damages to a property, without being at fault;
Another type of liability is injury and property damage, in which the owner is negligent, and this negligence is the cause of an injury or property damage |
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Term
| To whom is a property manager responsible? |
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Definition
| A property manager is responsible BOTH to the owner and to the tenants of a property. |
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Term
| How do the owner and the property manager arrive at a management fee? |
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Definition
| The fee is a negotiated item. It often is a base fee and/or a percentage of the collected rents. |
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Term
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Definition
| The manager must understand general accounting principles (GAP) and be able to prepare and interpret monthly and yearly reports |
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Term
| Dealing with Property Employees |
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Definition
| The property manager is technically the employer of almost all the people who work on site. As such, the manager is responsible for their instruction and supervision and should know the details of each employee's job. |
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Term
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Definition
| The rent roll of a property is a list of the number of rental units in a property, the length of each lease (expiration date), and the monthly income for each unit. The rent roll can be used to determine the annual rental income for the property. |
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Definition
| A statement of proposed rental rates, determined by the owner or the property manager or both, based on a building's estimated expenses |
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Definition
| malls which include stores owned by manufacturers, distributors, or others selling off-price merchandise. The success of many factory outlets depends on their size, location, and whether they carry name-brand merchandise, among other things. |
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Term
| What accounting skills are important for a property manager to have? |
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Definition
| The manager must understand general accounting principles (GAP) and be able to prepare and interpret monthly and yearly reports. |
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| List three skills needed by office building managers. (See page 17 for other correct answers.) |
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Definition
Analyze the local demographics to attract tenants
Negotiate leases
Develop competitive rent schedules |
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Term
| What tasks do managers of condos, coops and PUDs do that are different from other property managers? |
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Definition
| 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. |
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Definition
| This annual budget includes the income and expenses for ongoing operations. |
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Term
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Definition
| 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 predicable, but can become a property need at any time. |
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Term
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Definition
| A forecast of income and expenses that can be projected over a short period of time, usually five years. |
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Term
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Definition
| is a schedule of planned maintenance actions aimed at the prevention of breakdowns and failures. The primary goal of preventive maintenance is to minimize wear and tear and to preserve and enhance equipment reliability by replacing worn components before they actually fail. Preventive maintenance requires frequent inspection of all physical aspects of the property. |
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Term
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Definition
involves the repair or replacement of components which have failed or broken down. The objective of corrective maintenance is to restore the system to satisfactory operation within the shortest possible time. Corrective maintenance is typically carried out in three steps:
Diagnose the problem.
Repair and/or replace the faulty component(s)
Verify the repair action. |
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Term
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Definition
| involves remodeling, interior redecorating or new capital improvements. Money must be budgeted ahead of time for these activities. Construction often increases a property's value, which can attract new tenants or clients and increase income. |
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Term
| property management reports |
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Definition
The property manager must set up and maintain proper records, making regular reports, called property management reports, to the owner that are easily understandable and that cover all operations.
Monthly account statements
delinquent accounts
detailed annual statement |
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Term
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Definition
| The Institute for Real Estate Management (IREM) was created as a subsidiary group of the National Association of REALTORS® in 1933. IREM offers both educational and professional programs in property management. |
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Term
| Certified Property Manager© |
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Definition
| IREM developed the designation of Certified Property Manager© (CPM©) for individuals who meet a certain level of education and experience requirements. |
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Term
| Accredited Residential Manager© |
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Definition
| REM has a designation of Accredited Residential Manager© (ARM©) for resident managers who have a lesser degree of training and on-site experience. |
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| Accredited Management Organization© |
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Definition
| The designation of Accredited Management Organization© (AMO©) is reserved for companies who meet certain IREM guidelines and employ at least one CPM©. |
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Term
| What is a property manager's first responsibility to the owner? |
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Definition
| to realize the maximum profit on the property that is consistent with the owner's instructions |
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Term
| What are the three types of budgets that should be established for each project? |
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Definition
| operating budget, capital reserve budget, stabilized budget |
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| How does preventive maintenance differ from corrective maintenance? |
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Definition
| preventative maintenance is a schedule of planned maintenance actions aimed at the prevention of breakdowns and failures, while corrective maintenance involves the repair or replacement of components which have already failed or broken down |
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