In property management, what is a "pro forma"?

A "pro forma" in property management is a financial document that outlines projected future income and expenses for a property. It is crucial for assessing the financial viability of a real estate investment or managing a property effectively. The pro forma serves as a tool for property managers and investors to model financial scenarios, such as anticipating cash flow, evaluating the impact of market changes, or determining the potential profitability of a property over time.

This financial overview is based on assumptions about future performance, including anticipated rental income, operational costs, and vacancy rates. Such projections play a significant role in decision-making processes, helping stakeholders understand expected returns and budget accordingly for maintenance, improvements, and other costs associated with property management.

The other options represent important aspects of property management but do not capture the essence of a "pro forma." While tenant disputes and resolutions, property inspections, and rental agreements are all necessary components of comprehensive property management, they do not involve financial forecasting and planning in the same way that a pro forma does.