Property Management
What is a 'vacancy and credit loss' allowance in property management projections?
AThe tenant's credit score adjustment
BAn estimate of income lost due to vacancies and non-payment of rent, subtracted from gross potential income to arrive at effective gross income✓ Correct
CA discount for long-term tenants
DA tax deduction for vacant units
Explanation
Vacancy and credit loss is the income that will not be collected due to vacant units and tenants who fail to pay rent. It is subtracted from gross potential income when calculating effective gross income for a property.
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Key Terms to Know
Earnest Money
A 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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
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