Property Management
A property manager's operating budget should include all of the following EXCEPT:
AMortgage debt service payments✓ Correct
BProperty management fees
CRoutine maintenance costs
DInsurance premiums
Explanation
An operating budget covers income and operating expenses (management fees, maintenance, insurance, utilities, etc.).
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Key Terms to Know
Net Operating Income (NOI)
The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
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.
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