CRM Property Management Operations 2 — Questions and Answers
Question 1: A property manager receives a noise complaint at 11 PM on a Saturday. What is the most appropriate first step?
- Call the police immediately
- Document the complaint and contact the offending resident (Correct answer)
- Ignore it until business hours
- Issue an immediate eviction notice
Correct answer: Document the complaint and contact the offending resident
Documenting the complaint and contacting the offending resident is the appropriate first response, balancing tenant rights with community rules.
Question 2: Which financial statement best shows a property's revenue and expense performance over a specific period?
- Balance sheet
- Cash flow statement
- Income and expense statement (Correct answer)
- Rent roll
Correct answer: Income and expense statement
The income and expense statement (profit and loss statement) reflects revenues and costs over a defined reporting period.
Question 3: Under most state laws, how must a landlord handle a tenant's security deposit?
- Deposit it in the landlord's personal checking account
- Hold it in a separate escrow or trust account (Correct answer)
- Invest it in securities for a better return
- Return it immediately upon lease signing
Correct answer: Hold it in a separate escrow or trust account
Security deposits must be held in a separate trust or escrow account to protect tenant funds and comply with state statutes.
Question 4: A property manager wants to increase net operating income (NOI) without raising rents. Which strategy is most effective?
- Increasing deferred maintenance
- Reducing vacancy through improved tenant retention (Correct answer)
- Raising the security deposit amount
- Deferring all capital improvements
Correct answer: Reducing vacancy through improved tenant retention
Improving tenant retention reduces costly vacancies and turnover expenses, directly increasing NOI without a rent increase.
Question 5: What does the term 'effective gross income' represent in property management?
- Gross potential rent minus vacancy and credit losses (Correct answer)
- Total operating expenses plus debt service
- Net income after all deductions
- Total rent collected including late fees
Correct answer: Gross potential rent minus vacancy and credit losses
Effective gross income equals gross potential rent minus an allowance for vacancy and collection losses.
Question 6: Which maintenance category includes replacing a roof or HVAC system at end of useful life?
- Preventive maintenance
- Corrective maintenance
- Capital expenditure (Correct answer)
- Emergency maintenance
Correct answer: Capital expenditure
Replacing major systems at end of their useful life is a capital expenditure, not a routine operating expense.
Question 7: A prospective tenant has a low credit score but a strong rental history and solid income. What is the best fair housing-compliant approach?
- Automatically deny based on credit score alone
- Apply consistent written screening criteria and evaluate all factors together (Correct answer)
- Ask the applicant to explain their race or national origin
- Approve them only if they pay 3 months rent upfront without a policy for this
Correct answer: Apply consistent written screening criteria and evaluate all factors together
Applying consistent, documented criteria that weigh all qualifying factors ensures fair housing compliance and reduces liability.
CRM Property Management Operations 2
A property manager receives a noise complaint at 11 PM on a Saturday.
What is the most appropriate first step?