Property Management
A Connecticut commercial property manager prepares an annual operating statement for the property owner. The statement should include all of the following EXCEPT:
ATotal rental income collected
BAll operating expenses paid
CA projection of future rent increases✓ Correct
DNet operating income for the year
Explanation
An annual operating statement reports actual financial results—income collected and expenses paid—for the prior year. Projections of future rent increases are part of a budget or forecast, not a historical operating statement.
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Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Math Concepts
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