Oregon 30-Hour Real Estate Law Practice Test

What is a major focus of property managers to avoid financial losses?

1. Reducing rental prices

2. Keeping properties fully occupied

3. Conducting regular tenant surveys

4. Increasing maintenance costs

The correct answer is: Keeping properties fully occupied

The major focus of property managers to avoid financial losses is to keep properties fully occupied. When properties have tenants, they generate rental income, which is essential for covering expenses such as mortgage payments, maintenance costs, and property management fees. High occupancy rates contribute to consistent cash flow and ultimately increase the property’s value over time. By ensuring that properties are fully leased, property managers can minimize vacancies, which are periods when the property does not generate any income. A prolonged vacancy can lead to significant financial strain as fixed costs continue to accrue without any rental revenue to offset them. Maintaining high occupancy also enhances the property's reputation in the rental market, attracting prospective tenants and allowing for competitive rental pricing. While options like reducing rental prices or conducting tenant surveys may have some relevance in maintaining occupancy, they are not as critical to avoiding financial losses as the fundamental goal of keeping properties consistently rented. Increasing maintenance costs would not directly contribute to avoiding financial losses and could, in fact, lead to them if not managed carefully.