Asset and Property Management Flashcards
7 cards from real Real Estate Investing practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Asset and Property Management flashcards as text
A landlord wants to minimize vacancy between tenants. Which strategy is most effective?
Answer: Begin marketing 60 days before lease expiration
Starting marketing 60 days before a lease ends reduces vacancy gaps by attracting new tenants before the current one leaves.
What does a gross lease mean for a commercial tenant?
Answer: The landlord covers all operating expenses within the rent
In a gross lease, the landlord collects a flat rent and pays all operating expenses such as taxes, insurance, and maintenance.
Which metric best measures a property manager's effectiveness at controlling expenses?
Answer: Expense ratio
The expense ratio (operating expenses divided by gross income) directly shows how efficiently a manager controls costs relative to revenue.
A tenant refuses to vacate after their lease expires. This situation is called a:
Answer: Holdover tenancy
A holdover tenancy occurs when a tenant remains in possession of a property after the lease term ends without the landlord's formal renewal consent.
Which reserve account is used specifically to fund major capital improvements on a property?
Answer: Capital expenditure reserve
A capital expenditure (CapEx) reserve is set aside to pay for large, infrequent improvements like roof replacements or HVAC systems.
An investor owns a 20-unit apartment building. Which management structure typically maximizes control and minimizes fees?
Answer: Self-managing the property directly
Self-managing eliminates management fees (typically 8–12% of rents) and gives the owner direct oversight of operations and tenant relationships.
What is the primary purpose of a move-in/move-out inspection checklist?
Answer: To document property condition and protect against wrongful security deposit disputes
A documented inspection checklist with photos establishes a baseline property condition, making it defensible to retain or return security deposit funds.