Real Estate Investing Property Management Operations 3

Question 1

Which type of lease structure passes most operating cost increases directly to the tenant?

Accepted Answer

Triple net (NNN) lease

Answer

In a triple net lease, the tenant pays base rent plus property taxes, insurance, and maintenance, shielding the landlord from expense escalations.

Question 2

A tenant vacates without notice and leaves personal belongings behind. What should the property manager do?

Accepted Answer

Follow state-specific abandoned property laws, which usually require notice and a waiting period

Answer

Most states require landlords to provide written notice and a waiting period before disposing of or selling abandoned property to protect tenant rights.

Question 3

What does a property management agreement typically specify?

Accepted Answer

The scope of services, fee structure, authority limits, and termination terms

Answer

A comprehensive management agreement outlines services provided, fees charged, spending authority, reporting requirements, and how either party can exit the contract.

Question 4

An investor owns a 20-unit apartment complex. Which professional license is typically required to manage it for a fee in most US states?

Accepted Answer

Real estate broker or property manager license

Answer

Most US states require a real estate broker or property management license to manage rental properties for compensation on behalf of others.

Question 5

What is the typical consequence of co-mingling tenant security deposits with operating funds?

Accepted Answer

Violation of state law with potential fines and loss of license

Answer

Most states require security deposits to be held in separate trust accounts, and co-mingling is illegal and can result in significant penalties.

Real Estate Investing Practice Test

Real Estate Investing Practice Test

Real Estate Investing Property Management Operations 3