Property Management 2

1

100

One of the factors responsible for stimulating the growth of multifamily housing is

1. the job base of many firms.
2. more people moving into cities.
3. rising land and construction costs.
4. increase in availability of funds.

• rising land and construction costs.

100

Maintenance costs consume a substantial percentage of the property’s annual gross income. To run a cost-efficient operation,

1. maintenance crews should be allowed to determine their own priorities in order to work more efficiently.
2. discard programmed plans of maintenance actions because they are cumbersome and ineffective.
3. only one person should be assigned to a job.
4. service needs must be balanced by maintenance costs.

• service needs must be balanced by maintenance costs.

100

If a tenant fails to leave the property after the lease expires, what estate or tenancy is created?

1. Tenancy at sufferance
2. Tenancy at will
3. Estate from period to period
4. Holdover tenancy

• Tenancy at sufferance

100

A property has an annual income of $150,000, annual variable costs of $30,000, and a variable cost ratio of 25%. If one of these amounts were used to calculate the profitability of a building, what formula would be used?

1. IRV formula
2. Discounted cash flow
3. Band of investment analysis
4. Break-even analysis

• Break-even analysis

100

A property manager is preparing a five-year forecast for an owner. It assists the owner by presenting

1. a short-term projection of estimated expenditures and income.
2. a weak picture of the property’s income potential.
3. unpredictable changes.
4. the manager’s best judgment of what the property will do.

• the manager’s best judgment of what the property will do.

2

100

When forced to make rental rate concessions during poor market conditions, the manager should try to

1. lower the basic rental schedule by a very small amount.
2. grant a temporary rental concession.
3. offer the same concessions to all prospects in order not to discriminate.

offer concessions only for short-term leases.

• grant a temporary rental concession.

100

As the baby boomers move into the 21st century, they drive a need for

1. mobile home parks.
2. town homes.
3. planned unit developments.
4. facilities for the aging.

• facilities for the aging.

100

Every prospect should fill out a

1. statement of net worth.
2. request for a credit report.
3. lease application.
4. visitor registration form.

• visitor registration form.

100

The monthly earnings report

1. should include a list of current tenants.
2. is also a profit and loss statement.
3. consists of a list of delinquent accounts.
4. is a list of all disbursements and expenses

• is a list of all disbursements and expenses

100

Which of the following is the MOST expensive energy management technique?

1. Reducing temperature settings in warmer weather
2. Keeping heating and cooling equipment in good condition
3. Caulking and weather stripping
4. Retrofitting the HVAC equipment

• Retrofitting the HVAC equipment

3

100

Most management contracts begin with identification of the property and the parties to the agreement. When the property manager is an employee of the management firm, the

1. agency name should appear on the contract with the manager signing as authorized representative.
2. property manager’s name should appear with the property manager’s signature.
3. property manager becomes an employee of the owner and only needs to sign as an employee.
4. all of these

• agency name should appear on the contract with the manager signing as authorized representative.

100

Which of the following concessions is MOST likely to be utilized by commercial and industrial tenants?

1. Option to renew
2. Installing alterations prior to showing
3. Lowering advertised rents for an apartment
4. Customizing the facilities at the tenant’s expense

• Option to renew

100

The migration of people from the congestion of urban areas to the suburbs stimulated the need for

1. warehouse property.
2. light manufacturing property.
3. heavy manufacturing property.
4. industrial parks.

• industrial parks.

100

One method of terminating a tenancy is

1. to issue a pink slip to the tenant.
2. to refuse to renew the lease by giving proper notice of termination.
3. by giving the lessor ten days’ notice.
4. by allowing the renter to sublet the premises.

• to refuse to renew the lease by giving proper notice of termination.

100

Which of the following is emerging as the BEST way to first reach prospects?

1. Internet website
2. Classified advertising
3. Direct mail
4. Brochures

• Internet website

4

100

The executive function of property management includes

1. payroll preparation.
2. preparation of annual budgets.
3. check writing.
4. record keeping.

• preparation of annual budgets.

100

In computing the management fee, the profitability of the property is a primary determining factor. It is also TRUE that

1. the standard fee is 10% of gross collectible income.
2. there is no universally valid formula for determining property management fees.
3. the problems in managing properties are essentially the same regardless of size or condition.
4. national property management associations establish rates for compensation.

• there is no universally valid formula for determining property management fees.

100

Security deposits may be retained by the owner

1. if the money has already been spent.
2. to cover damages to the premises.
3. without providing the tenant with an itemized list of deductions.
4. if the lessee asks that it be returned.

• to cover damages to the premises.

100

Space for beginning companies is referred to as

1. research parks.
2. enterprise zones.
3. incubator spaces.
4. loft buildings.

• incubator spaces.

100

When can tenants make alterations to the property

1. When it doesn’t suit their needs
2. If the landlord doesn’t do it promptly
3. They can never make alterations to the property
4. With advance written permission from the owner

• With advance written permission from the owner

5

100

A management plan should include an operating budget, a five-year forecast, and

1. gross annual scheduled rental income.
2. optimum rents.
3. owner’s profit and loss statement.
4. comparative income and expense analysis.

• comparative income and expense analysis.

100

A program to reduce maintenance costs

1. is easily engineered and implemented.
2. requires cooperation of all persons involved in the management.
3. does not need to include emergency plans.
4. should focus on short-term planning.

• requires cooperation of all persons involved in the management.

100

What law in MOST states indicates that MOST leases should be in writing to be enforceable?

1. Statute of limitations
2. Statute of frauds
3. Uniform Landlord Tenant Act
4. Fair Housing Act of 1968

• Statute of frauds

100

The foundation for establishing good landlord tenant relations is

1. a good professional rent collector.
2. haphazard maintenance.
3. maintenance personnel with negative attitudes.
4. the move-in, move-out form.

• the move-in, move-out form.

100

Who of the following generally is MOST likely to be helped by the property manager to develop goals and objectives?

1. Corporate investors
2. Institutional investors
3. Government as owner
4. Private, entrepreneurial investors

Private, entrepreneurial investors