Property Management Fundamentals Flashcards

What is 'economic occupancy' in multifamily property management?

Answer: The ratio of actual rental income collected to potential gross income

Economic occupancy measures the actual rent collected as a percentage of the total possible rent if all units were occupied at market rate.

A property manager who commingles client funds with personal funds is violating which duty?

Answer: Duty of accounting

Commingling client funds violates the fiduciary duty of accounting, which requires keeping client money separate from personal or company funds.

Which lease type is most common in large retail or commercial properties where rent is tied to the tenant's sales volume?

Answer: Percentage lease

A percentage lease includes a base rent plus a percentage of the tenant's gross sales, commonly used in retail shopping centers.

What does 'concession' mean in property leasing?

Answer: A discount or incentive offered to attract or retain tenants

A concession is a benefit—such as free rent, reduced deposit, or a move-in gift—offered by a landlord to attract or retain tenants.

The IREM Code of Professional Ethics requires CPM members to do all of the following EXCEPT:

Answer: Guarantee a specific rate of return to clients

The IREM Code of Ethics does not allow CPMs to guarantee specific investment returns, as doing so would be misleading and unethical.

What is the primary purpose of a market analysis in property management?

Answer: To identify competitive properties and set appropriate rental rates

A market analysis identifies comparable properties, current rental rates, vacancy trends, and demand drivers to set competitive rents.