Ch.12 Property Management Practice Flashcards

Comprehensive flashcards covering the principles of property management, including investment terminology, property types, management plans, and maintenance functions.

What are the four main types of investment property that property managers usually specialize in?

Residential, office, retail, and industrial.

What specific type of relationship is created between a manager’s brokerage firm and a property owner when a property management agreement is signed?

An agency relationship.

How is yield defined in the context of real estate investment?

The investor's return on the investment.

In investment terminology, what does 'liquidity' refer to?

How easily the investment can be converted into cash.

What term refers to an increase in the value of property due to inflation, changes in demand, or other outside factors?

Appreciation.

How is equity calculated for a real estate property?

The difference between the value of the property and the liens against it.

What is the definition of cash flow?

The difference between the income and the expenses involved in an investment.

What is leverage in the context of real estate investment?

The use of borrowed money to invest.

Why do residential property managers spend a significant amount of time on marketing and leasing activities?

Because residential rental properties have a relatively high tenant turnover rate.

In an office lease, what is the purpose of an escalation clause?

It provides for periodic rent increases.

Why is tenant selection particularly critical for retail property management?

The success of one tenant is tied to the success of others, and rent often depends on a percentage of the tenant's business income.

What is the typical duration range for an industrial property lease?

$10$ to $25$ years.

According to the Law of Supply and Demand, what happens to value when supply exceeds demand?

The value of the item decreases.

What are the four types of analyses a property manager completes during a preliminary analysis for a management plan?

Regional analysis, neighborhood analysis, property analysis, and market analysis.

In a property management budget, what are examples of fixed expenses?

Property taxes, insurance premiums, and employee salaries.

In a property management budget, what are examples of variable expenses?

Utilities, maintenance, and repairs.

What is the legal eviction process called in California?

An unlawful detainer action.

Under California state law, what is the maximum security deposit allowed for an unfurnished residential property?

No more than two months' rent.

When a residential tenant moves out in California, within what timeframe must the landlord provide an itemized list of deposit deductions?

Three calendar weeks.

What periodic report details the money received and paid out in connection with a property and typically includes a rent roll?

A statement of operations.

What is the difference between preventive maintenance and corrective maintenance?

Preventive maintenance involves regular care to avoid potential problems, while corrective maintenance involves repairs to restore items to good operating condition.

What does a dispute resolution clause in a C.A.R.® property management agreement require the parties to attempt before proceeding to arbitration or a lawsuit?

Mediation.

What does an integration clause signify in a property management agreement?

That the document constitutes the entire agreement and replaces any previous agreements or negotiations.