DC Property Management Study Guide: Maximizing Property Value and Return, Exams of Nursing

Download DC Property Management Study Guide: Maximizing Property Value and Return and more Exams Nursing in PDF only on Docsity! DC Property Managers Study Guide -with 100% verified solutions 2024-2025-tutor verified Management Plan Assists the owner in meeting their goals while maximizing the property's value and return. The plan describes in detail the subject property's current use along with it's physical condition, fiscal projections, and operational issues (includes an analysis of the market regional & neighborhood). Organizational and educational programs available to assist in enhancing the property manager's knowledge, identifying resources to resolve issues, and expanding their business network. Institute of Real Estate Management (IREM), National Association of Realtors (NAR), Greater Capital Area Association of Realtors (GCARR), building Owners & Managers Association (BOMA), National Association of Real Estate Brokers, International Council of Shopping Centers (ICSC), and National Property Management Association. Market Analysis Focuses on regional and neighborhood evaluations. Includes demographic conditions, geographic features, governmental prospective, existing real estate supply, future developments, and tenant/resident demand Market Analysis & Competitive Property Analysis helps to..... Identify the subject property's strengths and weaknesses The Highest & Best Use When the property manager considers alternatives to improve the property's weaknesses or further enhance its strengths to improve overall economic performance. Analysis of Alternative Looks at the theoretical costs and corresponding increase in rents by making different improvements, even property's redevelopment. When determining the best use of property, alternatives to consider are......... Rehabilitate without altering its existing use, Modernize by updating finishes (more efficient equipment), Change the Use of building (including conversion), or Conversion to a condominium m ownership structure. Capital Expenditures Projects that help extend the property's life. Physical Obsolescene is characterized as a condition of aging (i.e. wear & tear) or deferred maintenance. Examples are worn carpet, peeling paint, a leaking roof, or dead landscaping Functional Obsolescene is characterized by old or outdated designs or building systems. Economic Obsolesence Represents a loss in value due to outside forces (i.e. location, market conditions). Examples would be an office building, locates in a small town, where the major employer closes. Investment Value A value generally used by investors Assessed Value The value used by government tax assessment offices is the net effective of Gross Potential plus (+) Expense Reimbursements minus (-) Vacancy Credit Loss plus (+) Miscellaneous Income. Net Operating Income (NOI) Represents the money that remains after the Operating Expenses are subtracted from Effective Gross Income. Debt Service includes both interest and principal reduction and is subtracted from Net Operating Income. Examples of Capital Expenditures include...... Improvements to a property that update appearance, replacement of major mechanical equipment (boilers), replacement of major building system (roof), renovating space, replacing old appliances. Escrow Accounts & Reserves In order for the owner to prepare for significant Capital Expenditures, it is common to establish an Gross Lease The property owner pays all Operating Expenses up to a certain amount. Commonly found in office spaces. What does the term "Net Lease" mean when referring to commercial leases? The tenant pays for some or all Operating Expenses in addition to base rent. Derivatives of this structure are Net-Net & Triple Net Leases. What does the term "Triple Net" mean when referring to commercial leases refers to commercial tenant paying ALL Operating Expenses including real estate taxes, insurance, roof maintenance, landscaping, etc. This is the most commonly found in industrial leases. Percentage Lease A lease, that requires tenant to pay rent based on a calculation that relates directly to the tenant's gross sales. Usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount. The rights of a property owner include........ The right of possession, the right of control, the right of exclusion, the right of enjoyment, the right to sell. What is a Leasehold Interest? When the owner leases a property, it temporarily transfers to the tenant a portion of the right of possession. Escalator Clause When multi-year leases contain a provision for the owner to increase the rent on the lease's anniversary date. Separation of Funds Funds must be kept separate from property manager's accounts. Funds that the property generates belong to the owner and should be deposited into owner's account. Asset Management focuses on The property's long term planning, leasing and asking rates, negotiates commercial leases, evaluates mortgages & opportunities to refinance the loan,considers strategies to maximize value and when to market the property for sale. What common method is used to determine a property's Investment Value? Net Operating Income is divided by the Capitalization Rate (NOI/Cap Rate= Value) What are the four categories related to Maintenance? Curative, Deferred, Routine, & Prevenative Curative Maintenance involves...... Fixing or repairing something after it has already broken. An example would be fixing a broken sink Excess Liability an umbrella policy is issued to provide coverage limits in excess of an underlying General Liability policy. Marketing Plan Is necessary for every property to find new residents or tenants primary goals is to identify as many qualified prospects as possible. A Management Plan is made up of how many what 7 components? Regional Analysis, Neighborhood Analysis, Property Analysis, Market Analysis, Analysis of Alternatives, Proposed Property Analysis, Investment Analysis. Functional Obsolescence can directly imapact Attainable rents at a building. Deferred Maintenance Involves delaying needed repairs and maintenance to save money. Examples of Deferred Maintenace Painting a corridor, sealing a leaky roof or repairing cracks. Preventative Maintenance can be defined as Preplanned, routine, and systematic schedule of inspecting, maintaining and repairing a facility and its equipment. Examples of Preventative Maintenance include Inspecting a roof every six months for damage membrane and flashing, inspection hoist cables. Types of Property Insurance include Fire & extended coverage, Theft/Crime, Boiler & Machinery, Rent Loss, & Catastrophe, Earthquake, Plate Glass, Liability, Excess Liability. Another name for Tenants Lessee Name some components of a valid lease Names of Lessee, name of owner property or agent w/ authority to lease, legal address of the premises, Statement of rental amount, including time place of payments made, and time periods to which rent applies. What is the designation of the National Association of Real Estate Brokers, Inc (Nareb)? Realtist An example of Functional Obsolescence is Equipment that can not be repaired because parts are no longer manufactured; single pane window systems that waste energy; outdated bathroom fixtures because of changing design and taste. Alternatives to consider when making different improvements or when redeveloping a property Rehabilitation without altering existing use, Modernize the property by updating finishes, Change the use of building, including converting to another property type, or demolishing for new development, or Conversion to a condo ownership structure. Actions that could put management company and owner at risk include: Improper handling of evictions, unlawful rent collections, failure to return security deposit, not maintaining proper compliance with Rental Accommodations Division (RAD). The purpose of the Budget process is to Develop a means to track the property's performance and to organize various types of income. By organizing income & expenses is easier to see trends, to determine unusual or non-recurring items. Gross Potential Rent Income Is the maximum amount of income that a property can generate from all sources. Effective Gross Income Is the Net effective of all items listed above equals Gross Potential Rent Income includes Expense reimbursement minus Vacancy and Credit Loss plus Miscellaneous Income. In order to generate a list of what to be inspected on a property A walk-through of the property and all of the areas related to its mechanical, electrical, telephone, and life safety equipment needs to be conducted. Frequency of inspections are determined annually, semi- annually, quarterly, and monthly. Request For Proposal or RPF To develop a clear and thorough specification for contracts to bid on is called What is included in an RPF? Scope of work, how is to be performed, frequency, special requirements, work hours, timetable to complete, insurance requirements, deadline for submission, number of personnel to be provided, warranty, & references. Before marketing an available space or unit, Be sure that it is clean and presentable and that the owner has approved all marketing plans. What is a legal reason for a landlord to evict a tenant? Landlord wants to occupy the rental unit. All evictions except non-payment of rent must be filed with Rental Accommodations Division (RAD) A landlord may evict a tenant for only one of ten statutory reasons some of those reasons include Nonpayment of rent, Violation of an obligation of tenancy, of which the tenant failed to correct after notice; Tenant performed as illegal act within the rental unit. A property's foreclosure in not A legal basis to evict tenant. Should an eviction occur, there is no change in tenant's rights. Owners are required to File an income tax return, file & maintain accurate records of all income and expenses. Security Deposits Owner is required to pay interest on security deposits. Smoke Detectors should be installed at least 1 smoke detector per sleeping area, in the room used for sleeping and outside the bedroom but in the mediated vicinity of the sleeping area. Each owner should install smoke detectors an comply with the requirements of The Smoke Detector Act of 1978. Smoke detectors should be directly wired to The power supply of the building. The owner shall post in conspicuous places Instructions on the operation of the fire alarm, whether the apartment building fire alarm is separate from or connected to detectors in the individual unit or building, connected to Fire, Medical Services, and a warning that in the event of a fire call 911. No owner shall place in the lease or rental agreement a provision Waiving the right of a tenant to a jury trail or that the tenant pay the owner's court cost or legal fees Every employer shall pay all wages earned to his employees at lease twice during each calendar month Employee must receive compensation at a rate of 1 1/2 times the regular rate at which the employee is employed. In accordance with the D.C. Human Right Act of 1977 DC does not discriminate on the basis factual or perceived. The Office of Human Rights was established In 1999 The housing provider must give a 30-day notice Before increasing rent A tenant organization must set a date of election and notify the owner within 30-days The date of election must be held within 60 days The Conversion Sale & Regulatory Office shall schedule and conduct an election within 45 days The owner must provide tenants of a housing accommodation how many days notice of intent to convert to a cooperative or condo 120 days The owner should pay relocation expenses within 7 days of receiving request for payment. The owner will a minimum of $125 up to a maximum of $500 for Relocation expenses. A request from an owner or tenant must be made in 15 days of the 30 day expiration period allowed for the tenant organization to set a date for an election after coordinating the date with the Conversion & Sales Regulatory Office. Investment Value Equation Net Operating Income divided by Cap Rate Return On Investment Equation Cash Flow divided by Initial Investment