ARM (IREM) flashcards
ARM · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Management agreement
- Written contract that states the manager's authority, services, fees, reporting, term, termination, and owner obligations for a property.
- Occupancy rate
- Percentage of rentable units that are occupied at a point in time, calculated as occupied units divided by rentable units times one hundred.
- Economic occupancy
- Percentage of gross potential rent actually collected, calculated as collected rent divided by gross potential rent times one hundred.
- Turnover rate
- Percentage of units that changed residents during a period, calculated as move-outs divided by average unit count times one hundred.
- Make-ready
- Process of cleaning, repairing, painting, and preparing a vacant unit for the next resident before move-in.
- Owner statement
- Monthly report showing income, expenses, net operating income, cash flow, reserves, occupancy, and delinquency for the owner.
- Assistance animal
- Animal that provides disability-related assistance and is not a pet; pet fees and pet deposits generally cannot be charged, but damage charges may apply.
- Closing ratio
- Percentage of qualified prospects who sign a lease after touring, calculated as leases signed divided by qualified tours times one hundred.
- Cost per lease
- Marketing expense for a period divided by the number of leases signed in that same period.
- Vacancy loss
- Rent lost from vacant units, calculated as vacant unit-days multiplied by daily rent for those units.
- Fair housing advertising
- Property advertising must describe the property and amenities, not preferred resident characteristics, and must comply with fair housing laws.
- Adverse action notice
- Notice telling an applicant that a rental application was denied or approved conditionally, including the reason and required disclosures.
- Prospect source tracking
- Recording how each prospect learned about the property so marketing spending can be linked to lease results.
- Net operating income
- Effective gross income minus operating expenses; it excludes debt service, income taxes, depreciation, and capital expenditures.
- Effective gross income
- Gross potential rent minus vacancy and credit loss plus other income such as fees, parking, and laundry.
- Cap rate
- Net operating income divided by property value, expressed as a percentage; value equals net operating income divided by cap rate.
- Operating expense ratio
- Operating expenses divided by effective gross income, expressed as a percentage of income consumed by operations.
- Debt service coverage ratio
- Net operating income divided by annual debt service; a ratio below one means income does not cover loan payments.
- Delinquency rate
- Delinquent rent divided by total rent billed for the same period, expressed as a percentage.
- Budget variance
- Difference between actual and budgeted amounts; for expenses, actual below budget is favorable, and actual above budget is unfavorable.
- Work order priority
- Classification of repair requests by urgency, such as emergency for life safety or no heat, urgent, and routine.
- Preventive maintenance
- Scheduled inspection and servicing of equipment and building systems to reduce failures and extend useful life.
- Incident report
- Written record of an accident, injury, or property damage that states facts, time, people involved, and actions taken.
- Certificate of insurance
- Document showing a vendor's insurance coverage, limits, and additional insured status before work begins on site.
- Replacement reserve
- Funds set aside from income for future capital repairs and replacements such as roofs, paving, and appliances.
- Master key log
- Record of who signed out and returned a master key, used to control access and detect missing keys.
- Fiduciary duty
- Legal obligation of a manager to act in the owner's best interest with loyalty, disclosure, confidentiality, and proper accounting.
- Conflict of interest
- Situation where a manager's personal or financial interest could influence decisions and must be disclosed and avoided.
- Protected class
- Group of people protected from housing discrimination by law, including race, color, religion, sex, national origin, familial status, and disability.
- Retaliation
- Adverse action against a person for filing a complaint, reporting harassment, or exercising a legal right; it is prohibited.
- Nonexempt employee
- Employee entitled to minimum wage and overtime pay under wage and hour law, usually paid hourly.
- Confidentiality
- Duty to protect resident, applicant, owner, and employee information from unauthorized disclosure or use.