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Real Property Management Exam 1

Terms in this set (33)

real property
begins with the surface of a parcel of land and moves on to the owners rights to the air above the surface and the soil and minerals beneath the surface, as well as anything permanently attached to this land, either by nature or human hands
residential property
the largest source of demand for the services of professional property managers.
commercial property
considered to be a "public accommodation" - a private entity that provides goods, services, facilities, or accommodations to the public.
office property
can consist of low-rise (walkup) offices; high-rise complexes; or office parks (also called business parks) Its location determines its success relative to the prospective workforce, transportation facilities, and other business services
retail property
includes freestanding buildings; traditional shopping centers designated by size (strip centers, neighborhood centers, community centers, regional shopping centers, and super regional malls); and specialized centers, such as off-price stores, factory outlets, and specialty centers
industrial property
includes all land and facilities used for heavy and light manufacturing, for storage, and for the distribution of goods
special-purpose property
Hotels, motels, clubs, resorts, nursing homes, theaters, schools, colleges, government institutions, and places of worship are considered
asset management
refers to financial management of a stable number of investment properties
corporate property managers
create facilities and manage properties for corporations that invest in real estate
Institute of Real Estate Management (IREM)
An organization acting as an exchange for management ideas, and recognizing achievement in the field. Has a Code of Ethics for real estate managers.
National Apartment Association (NAA)
created in 1939, sponsors courses for certified apartment managers, certified apartment maintenance technicians, and certified apartment property supervisors
code of ethics
a formal statement of ethical principles and rules of conduct
business cycles
wavelike movements of increasing and decreasing economic prosperity. It consists of four phases: 1. expansion, 2. recession, 3. contraction, 4. revival
expansion phase
Phase where production increases. Country is working at near full-employment level, demand for goods increase, prices increase because of greater demand, the purchasing value of the dollar decreases, credit is eased, and more money becomes available for purchasing
recession
This phase occurs when supply meets and begins to surpass the demand for products and services. This is the peak of the cycle.
contraction
This phase is immediately after the recession phase or peak has been reached, there is less and less demand for products, so fewer products are made. Consumers spend less and confidence in economy is shaken.
revival
This phase of the general economy begins when consumers venture back into the market. Excess of supplies of goods have been exhausted, major purchases can no longer be postponed, and consumers are lured into buying by lower prices.
lull
"trough" or hollow occurs between the two ridges of contraction and expansion. A business activity increases slightly, confidence begins to return
market analysis
integrates information about the larger overall region with detailed information about the specific, local area where the property is located.
regional market analysis
report that should include demographic and economic information on the regional or metropolitan area in which the subject property is located
Neighborhood Analysis
should begin with a tour of the area. Equipped with local maps, zoning ordinances, applicable building codes, and statistical data on the population, the property manager should assess six major factors
technical oversupply
occurs when there are more units available than potential tenants
economic oversupply
reflects the fact that potential tenants cannot afford to pay the price of the available space
property analysis
familiarizes the manager with the nature and condition of a particular building and with its position relative to similar properties in the neighborhood
gross rental income
is determined by multiplying the amount of space in the building by the base rental rate for that type of space.
gross collectible income
(gross adjusted rental income) It represents monies that actually may be collected after rent loss
five-year forecast
long-term projection of estimated expenditures and income based on predictable changes
comparative income and expense analysis
an estimate of the costs of improvements, alterations, or remodeling that are consistent with the owner's objectives and are needed to command optimum rentals
Employer-Employee Relationship
a relationship that results when an employer hires an employee to perform some task or service but the employee has not been authorized to enter into contracts on behalf of his employer
trust
a device by which one person or institution transfers legal ownership of property to someone else to hold or manage for the benefit of a third party
principal-agent relationship
The relationship between a principal and his or her agent. This relationship may be affected by the fact that each is motivated by self-interest, yet their interests may not be well aligned
principal
the one who hires
agent
the one who does the work
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