Tennessee Realtor State Practice Exam

In which area of property management can a manager expect to encounter a lot of turnover?

1. Commercial properties

2. Residential properties

3. Industrial properties

4. Mixed-use properties

The correct answer is: Residential properties

In property management, residential properties typically experience higher turnover rates compared to other types of properties. This is largely due to factors such as leases being shorter in duration, individuals and families frequently relocating for jobs or personal reasons, and changes in life circumstances that lead to the need for different living arrangements. Residential properties attract a diverse range of tenants - from students to families to retirees - each with unique housing needs and timelines. As people’s circumstances change, they may move on from their current residences more frequently. This leads property managers to see a steady influx of new tenants and the need for ongoing marketing efforts to fill vacancies. In contrast, commercial properties often have longer lease terms, and industrial properties are even more stable, as businesses typically seek to establish a long-term presence. Mixed-use properties can blend characteristics of residential and commercial management, but still may not match the turnover levels found in purely residential properties. Thus, the nature of residential leasing inherently results in more frequent tenant turnover, making it the area where property managers can expect to see a lot of changes.