Property management

A property manager has a fiduciary relationship with the owner. 


The primary goals of the property manager are to generate the highest net operating income while maintaining the value of the property.


A property manager is a general agent of the owner because they are engaged in an ongoing business relationship.


Most states recognize property management contracts as personal service contracts that terminate upon the death of either party.  Most states require property management agreements to be in writing.  A property manager may be paid based on the gross or net income the property produces



The duties of a property manager include:

- Preparing the budget

- Allocating the money for fixed expenses, operating expenses and reserve funds

- Selecting quality tenants witch involves being familiar with the market rent verses the contract rent.

- Offering concessions to attract tenants.


The lease agreement should specify when the rent is due.  If the lease does not specify a date, rent is due the last day of the leasing period.


The property manager should maintain good relationships with the tenants. The duties of maintaining the property include hiring contractors and employees overseeing their work.

The property manager must reserve funds for capital expenditure such as remodeling and renovating the property.


A property manager should have knowledge of the following:

- Market conditions

- Record keeping

- Expenses

- How to Hand of environmental hazards

- Risk management


Risk management involves evaluating the need for insurance coverage to protect the owner and manager from risk such as:

- Loss of revenue

- Liability from injury of anyone on the premise

- Loss due to fire

- Medical coverage for employees

- And casualty losses


The four options a property manager has for avoiding risk are:

- Avoid the risk by removing the problem

- Retain the risk by purchasing insurance with a large deductible

- Control the risk by installing protective equipment

- Transfer the risk by obtaining insurance with no deductible

Introduction

Bundle of Rights  

License   

Government Rights  

Police Power   

Eminent domain   

Taxation   

Escheat   

Real vs Personal Property

Annexation   

Appurtenances   

Fixtures   

Trade Fixture   

Emblements   

    OR-EE Rule   

Estates

Freehold Estate   

Fee simple absolute   

Fee simple Defeasible   

Life estate   

Less than freehold estate   

Estate for Years   

Periodic Tenancy   

Estate at will   

Estate in sufferance   

Types of Leases   

Gross lease   

Net lease   

Percentage lease   

Lease option   

Property management

Contracts

Essentials of a valid contract   

Capable parties  

Lawful object   

Consideration   

Offer and acceptance   

Types of Contracts   

Valid, Void & Voidable Contracts   

Implied contract   

Bilateral & Unilateral contacts   

Executed & Executory   

Option contract   

Land Contract   

Listings   

Types of Listings contracts   

Exclusive Listing   

Exclusive Authorization and right to sell Listing   

Exclusive Agency Listing   

Open Listing   

Net Listing   

Listings with an option   

Multiple listing service   

Agency   

Universal agent   

General agent   

Special agent   

Attorney in fact   

Principal and Client   

Transaction broker   

Dual or limited agency   

Practice and disclosure   

Stigmatized property   

Puffing   

Fraud   

Actual fraud   

Negative fraud   

Constructive fraud   

Negligence   

Federal Law   

Truth in Lending   

Fair Housing   

Steering   

Blockbusting   

Sherman antitrust laws   

Easement   

Easement in gross   

Implied easement   

Prescriptive easement   

Termination of Easement   

Encroachment   

Zoning

Property Transfer

    Deeds   

    Wills   

Title   

Title insurance   

Forms of ownership   

Tenancy in common   

Joint tenancy   

Community property   

Trust   

Subdivisions   

Condominium   

Cooperative   

Time Shares   

Cluster housing   

Liens   

Appraisal   

Appraisal Principles   

Principle of Highest and Best Use   

Principle of Substitution   

Principle of Conformity   

Principle of Contribution   

Principle of change   

Market Value   

Steps in the appraisal   

Appraisal methodology   

Market data approach   

Capitalization (income) Approach   

Cap Rate   

Cost (replacement) approach   

Gross Rent Multipliers   

Depreciation   

Physical Deterioration   

Functional Obsolescence   

Economic Obsolescence   

Financing   

Lenders   

Primary mortgage   

FHA   

VA   

Types of Loans   

Loans clauses   

Investing   

Construction Terms   

Test Taking Tips