Hawaii Pre-Licensing National Practice Exam

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Prepare for the Hawaii Pre-Licensing National Exam. Study with flashcards and multiple choice questions, each question provides hints and explanations. Get ready for success!

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What is the management fee percentage for the first $200,000 of annual gross collected rent?

The correct answer is: 7%

The management fee percentage for the first $200,000 of annual gross collected rent is typically set at 7%. This figure is standard in many property management agreements and reflects the costs associated with managing a property effectively. The fee structure is designed to compensate property management companies for their services, which often include tenant screening, rental collection, property maintenance oversight, and financial reporting. Using a percentage system allows property owners to allocate a reasonable proportion of their rental income toward management costs, which is essential for maintaining the property's condition and ensuring tenant satisfaction. The selection of 7% as the management fee aligns with common industry practices, making it a reliable figure for budgeting and financial planning for property owners. Other percentages like 5%, 6%, and 8% may vary depending on the specific management company, the property type, or local market conditions, but the 7% is widely recognized as a standard fee for the first tier of gross collected rent in many regions.