Property Management Final Exam Review Questions with Answers Latest Update, Exams of Business Economics

Download Property Management Final Exam Review Questions with Answers Latest Update and more Exams Business Economics in PDF only on Docsity! Property Management Final Exam Review Questions with Answers Latest Update Which statement is true? A. property management and real estate brokerage is the same thing B. all real estate brokers in Texas must allow sponsored agents to perform property management activities C. some real estate brokers do not allow property management activities by their sponsored agents Property management is not considered a real estate brokerage activity in Texas - Correct Answer C. In Texas, agents need to be _______ in order to show, lease, or accept payment for soliciting space for property owners - Correct Answer licensed A _____________ is a person who, for a fee, manages a property for someone else. - Correct Answer property manager The four phases of a business cycle are... - Correct Answer prosperity, recession, contraction and recovery Equilibrium is reached if - Correct Answer there is high supply and high demand Which statement is true...? A. real estate cycles can take longer than the general economic cycle B. real estate cycles and general economic cycles always move at exactly the same pace C. general economic cycles always take longer than real estate cycles D. no one can ever predict real estate or economic cycles - Correct Answer A The four "P's" of marketing include... - Correct Answer Product, promotion, price, and place The fiduciary duties a property manager owes to the owner are... - Correct Answer Obedience, loyalty, disclosure, confidentiality, accounting and reasonable care Which of the following should be included in a property management agreement...? A. policies and procedures for the repair of the property B. duties and responsibilities of the property manager C. the management term D. all of these - Correct Answer D Which statement regarding reserves is incorrect...? A. Reserve amounts are established based on the age, size, and residential profile of the property. B. Older, larger properties will need more money in reserves to pay for repairs, etc. C. Reserves are held by the property manager to pay service providers and other costs associated with managing the property D. The money for reserves comes from the property manager's own business accounts - Correct Answer D A written rent collection policy should include... A. suggestions for fire safety B. when to pay C. repair request forms D. lease renewal policies - Correct Answer B A property manager may not charge a late fee unless - Correct Answer it is clearly stated in the written lease Read the scenario and answer the questions that follow. Investor Mike owns a 200-unit residential property. He calls up his property manager, Jay, and informs him that he needs to raise the rent on each unit by 5% per month in the next 12 months as lease terms expire or units are released. Jay knows that most of the residents will not balk at a $45 per month increase because it will cost much more than that to move. Assume that the property is at 100% occupancy. How much will the property's monthly income increase if each unit's rent is raised by $45 per month? A. $900 B. $9,000 C. $2,000 D. $200 - Correct Answer B- Amount of units (200) multiplied by the rent increase ($45) = 9,000 Read the scenario and answer the questions that follow. Investor Mike owns a 200-unit residential property. He calls up his property manager, Jay, and informs him that he needs to raise the rent on each unit by 5% per month in the next 12 months as lease terms expire or units are released. Jay knows that most of the residents will not balk at a $45 per month increase because it will cost much more than that to move. Assume that the property is at 100% occupancy. How much will the property's yearly income increase if each unit's rent is raised by $45 per month? A. $900,000 An older building recently completely renovated, is located in a popular area amid several prestigious brand-new buildings by BOMA standards the older building would be classified as - Correct Answer class B The ratio of rentable space to usable space is sometimes called the - Correct Answer Loss factor Generally, the cost of tenant alterations and remolding expenses above the building standard in an office property is the responsibility of the - Correct Answer lessee The purpose of the building standard is to - Correct Answer list the amenities and alterations that a building owner will provide to an incoming tenant without charge The manager measures all of the space on one floor then the manager subtracts the square footage for the restrooms, janitor’s closets, and elevator. The resulting square footage is called - Correct Answer usable space When preparing a market analysis on an office property the manager should pay close attention to the present market conditions and - Correct Answer current economic trends The base rate for an office building should - Correct Answer reflect the amenities of the space and competition in that area Office space is designated class A, B, C, or D on based on... - Correct Answer age, location and market position The absorption rate is determined by - Correct Answer calculating the number of square feet that have historically been leased per year One of the most effective methods to locate a new tenant for an office property is - Correct Answer canvassing a list of qualified prospects An employee of an office building tenant who is responsible for the internal arrangement and furnishing of the leased space is called - Correct Answer facilities manager While longer lease terms are most desirable to protect the owner from missing out on rising market rates, the lease should contain - Correct Answer an escalation clause What is not useful while marketing office property - Correct Answer classified ads? Which of the following factors was most important in the selection of office facilities according to one survey - Correct Answer Cost? A financial statement showing the owner what affect the investment property has on the owner’s income in terms of tax benefits - Correct Answer cash flow analysis A salesperson skilled in communication and telephone techniques, on-site customer- qualifying, and closing the sale - Correct Answer leasing agent In order to increase profitability the manager needs to... - Correct Answer know the population density within a particular neighborhood The most common method of marketing residential apartments - Correct Answer classified advertising Usually found in urban areas and in older, more concentrated sections of the suburbs. Generally preferred by couples and singles most include one or two bedroom apartments - Correct Answer walk up Surveys of comparable properties and economic conditions are part of the - Correct Answer market analysis Which of the following types of apartment community is most likely to be located in downtown urban areas - Correct Answer a high rise luxury property? Which of the following is generally less profitable because they require more management time - Correct Answer scattered site housing? Which factor of the market analysis should rent be based on - Correct Answer comparable value to other properties Of the following which is most likely to be prepared by the resident manager - Correct Answer property condition, work performed, and jobs anticipated in the following week Unlike condominium manager, apartment managers are responsible for maintaining - Correct Answer occupancy levels Residential leases are typically... - Correct Answer gross leases Professionals whose primary responsibility is to attract prospects show space and secure tenants are called - Correct Answer leasing agents A manager notices that his residents are very "pet-friendly" and believes that the addition of a dog park on the property would help retain good residents, attract new prospects, and potentially increase rents. After receiving bids, he builds the park for $40,000. Over the next year, the net operating income for the property increases by $10,000. Assume the cap rate for this property 8%. Which of the following is the best analysis? - Correct Answer this was a good investment because it increased the value of the property by $125,000 A lease clause providing that the rental rate will increase or decrease according to a selected index of economic conditions such as the consumer price index - Correct Answer escalation clause A common residential lease under which the tenant pays a fixed rental and the landlord pays all operating costs for the property - Correct Answer gross lease Require the tenant to pay rent, utilities, real estate taxes and assessments - Correct Answer net lease Require the tenant to pay rent, utilities, real estate taxes, assessments and insurance - Correct Answer net-net lease Require the tenant to pay rent, utilities, real estate taxes, assessments, insurance and an agreed-on price for maintenance and repairs - Correct Answer Unofficial guidelines defining office space based on age, condition, location, facilities, and amenities - Correct Answer BOMA building classifications Operating expenses+ =mortgage payments + owners return on equity divided by rentable area of a building = - Correct Answer minimum rent 4 phases of the business cycle - Correct Answer expansion, recession, contraction, and revival Laws designed to preserve free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition - Correct Answer anti- trust laws The federal law passed to protect borrowers when applying for a loan denial must be based on sound business reasons - Correct Answer Equal Credit Opportunity Act (ECOA) A violation of anti-trust laws whereby brokers or managers conspire to fix (set) rental or compensation rates - Correct Answer price-fixing A method of relating a property's value, its net annual income, and rate of return on the owner’s investment Income divided by value multiplied by 100% = - Correct Answer Capitalization rate All of the following are correct regarding the rationale behind validating prospects financial references except - Correct Answer prompt and steady payers are inconsistent in meeting their obligations Another word for concession is - Correct Answer inducement