Property Management Blog

Why a Home Warranty is Not a Good Idea in Atlanta

FourandHalf Blog Post - Tuesday, July 15, 2014


Home warranties are not always everything they are advertised to be. A lot of property owners come to us with houses that have a home warranty in place. Often, people are sold the idea that a warranty will provide an extra insurance policy against damages and other problems. That’s great if you’re not the person dealing with the warranty company and the way most of them do business. They are horrific in the eyes of most professional property managers.

There are lots of reasons home warranties don’t work. Think about the business model: most companies don’t go into business to lose money. A warranty company isn’t going to collect a premium from you that is hundreds of dollars and then payout a claim that is thousands of dollars. It doesn’t work that way. If it did, they’d be out of business. Go into any American city, and you’ll notice the tallest and loveliest buildings belong to insurance companies and banks. They got that way by collecting money, not handing it out.

It’s not that legitimate claims won’t get paid. It’s just far more difficult to get those claims paid than you would imagine.

The loss of control is also a problem. When there’s a service call for one of our properties, our maintenance team at Title One Management is on it immediately. We can dispatch our guys in 20 minutes and have the problem fixed right away. With a home warranty company, you have to go through multiple levels of people before you can get someone out to look at the problem. Fixing it might take three or four days or even weeks. That can be a major liability issue for you, especially if you have a tenant without heat in the winter or air conditioning in the summer.

When the vendor does finally arrive to fix the problem, our experience has shown that it’s not always the best and brightest vendor. They tend to do poor work. Also, if you think you aren’t going to have to pay anything because you have the warranty in place, you’re wrong. You’ll be charged a trade call fee, which is often between $75 and $150. This is similar to a deductible you pay your insurance company. You’re paying money just to get a repair covered.

Warranty companies are also very skilled at not covering things. They might cover a broken condenser but then they won’t cover the furnace. All in all, it’s not worth it and it’s a waste of money for homeowners.

If you have any questions or you’re considering a warranty on your rental home, please contact us at Title One Management, and we’ll talk to you in more detail.

Atlanta Landlord Advice Investment Property Tax Appeals

FourandHalf Blog Post - Thursday, July 10, 2014

Our topic today is the property tax appeal process in Georgia. This is an important topic because property taxes are usually your number one expense after your mortgage. A lot of people just pay those taxes without giving them much thought, but it pays to know you can fight those taxes and drive down the amount you pay. This will affect your bottom line.

In Georgia, everyone must file a property tax return annually, between January 1 and April 1. You file a PT50R form. The problem is that not all homeowners know this. When you don’t file your PT50R, you are accepting by default the value the government places on your property. That’s fine if the value is correct, but if it’s off, you’ll have to spend a lot more money in property taxes than you should. Many times, the assessed value of your home is nowhere near its actual value. This is especially true in today’s economic climate, when many homes are still trying to rebound in value from the housing crisis.

Assessors assign value to your property in one of three ways. They use uniformity, a sales comparison including properties around you, and a level of income achieved by your home if it’s a rental property. In the appeals process, people generally don’t use the income approach. Using uniformity or the sales cost and comparison is what we always recommend. Uniformity simply means that your property is assessed evenly or with the same guidelines as those properties around you. Many times, they aren’t assessed uniformly, so you have a case to be made. The sales approach is the most popular one. This is especially true since the legislature passed a law two years ago that says foreclosed properties have to be given equal weight in that sales comparison model.

Filing the PT50R gives you an extra bite of the apple. Right now, if you file it by April, the tax assessor will look at your property and assess it for value. Normally, they don’t do that. They prefer to accept the listed value. Filing your return forces them to really look at it and place a true value on your property.

Once your paperwork is filed, they will contact you and let you know if they agree or disagree with the value you returned. This is a place where you might gain a little even if they disagree with you. For example, your property could be assessed at $100,000. You’ll return your PT50R saying your property is actually worth $50,000. If they don’t want to go down to $50,000, they might at least come down to maybe $80,000. That’s a gain for you. You got money back just by asking.

Your next step could be to file an appeal. At that point, you will go before the County Board of Equalization to get another chance at having your property accurately valued. At this point, the tax assessor will probably take another look in order to avoid the work that’s involved in appearing before the Board. It may help you to have the Board make a determination instead of the tax assessor.

This is a process that can become complicated, but we recommend you go through it for your property. There are lots of rules and regulations involved, so if you have questions, please contact us at Title One Management.

How to Protect Your Assets in Atlanta with LLCs and Trusts

FourandHalf Blog Post - Wednesday, July 02, 2014

Many of our investor clients have questions about the best way to own a rental property. It’s a complex topic to address, but I want to start answering it by telling you how I personally own my rental properties. This is just a very high level summary that shows you one way to do it, and we can provide detailed instructions at a later time. 

Here’s a disclaimer: I am not a lawyer or a financial and investment advisor. I know what I’m talking about, because I’ve been doing this for many years, but before you make any moves with your own investment property, you might want to seek professional advice. Everyone has a different situation and different investment goals.

When you own a property, you can set it up so that the home is owned by a living trust. This is sometimes called a land trust, but it’s the same thing. That trust has a beneficiary and a trustee. The trustee is a person you trust and that person becomes the public face of the property. The beneficiary isn’t really the owner of the property, but they receive all the benefits associated with that piece of property. They are assigned the beneficial interests of that house. In my case, the beneficiary of my properties is an LLC.

LLCs have a lot of benefits and that’s why I like them. They are very simple to set up and maintain. In my opinion, an LLC is a perfect entity. The LLC you create is owned by someone. It can be another LLC or even a trust. To keep things simple let’s assume the LLC is owned by you, your spouse and your children. 

The trust provides you with anonymity but you get very little asset protection because a trust is not an entity.  Trusts are more for privacy so that’s where the LLC helps out; you can get legal protection through your LLC. 

This has been a quick, broad look at a good way to own rental properties. I suggest you consider it when you want to buy an investment property but you’re not sure how to best protect that asset. If you have any questions, or you’d like more specific information on how to make this work for you, please contact us at Title One Management

Why Section 8 Tenants are not a Good Idea in Atlanta

FourandHalf Blog Post - Tuesday, June 24, 2014

A lot of landlords ask us if we take Section 8 tenants. Many people do not have an accurate understanding of what the program is. They think it sounds like a good source of income from the United States government. Today, we want to tell you what’s involved in Section 8 and why you should think carefully before getting involved.

The Section 8 program is really a housing assistance program administered by the Department of Housing and Urban Development (HUD). It gets pushed to the state level and ultimately to the local housing authority level. Subsidies are provided to tenants who cannot afford the full rent amount. The major benefit for landlords is that you are getting most or all of your rental income directly deposited into your bank account from the government. That’s a good thing, but there are some big challenges as well.

For starters, you are entering into a contract with the government. The government is going to expect a lot from you before they give you any money. Lots of strings are attached to this contract. The longest string is the HAP addendum. This HAP addendum is 17 pages and it must be attached to your lease anytime you have a Section 8 tenant. Professional landlords often have outstanding leases that are pro-landlord. These leases have a lot of teeth and they keep the property owner in control. The HAP addendum supersedes that lease and takes out a lot of those teeth.

Your house will also have to pass an inspection. Before it can be approved for Section 8 tenants, an inspector will look around to make sure it meets minimum standards. This might seem easy, but there will always be something you need to repair. In addition to this initial inspection will be an annual inspection. Your property will be scrutinized every year and you’ll get more instructions on what you need to do. For example, one Section 8 landlord was just told he needs to put a new deck on his property. That could be up to $6,000 he has to pay, and it’s a huge ordeal. If you don’t do it, the government and the tenant can stop paying rent.

There are some other things to be prepared for. It takes a little time for your ACH to get set up and for money to be deposited into your account. It won’t be like a traditional rental, where someone hands you a check and they move right in. Raising the rent is also hard. You have to get the government’s approval before you raise your rent. That’s an extra step and additional paperwork.

Many people don’t realize that if the Section 8 program runs out of money, you’ll stop getting paid. Congress defunds these programs all the time and they only have so much money all year. They can run out of money and then you’re left without any rent. Also, extra notice is required for a lot of things. For example, if you are going to evict a tenant, you’ll need to let the housing authority know before you start those proceedings.

There are several misnomers when it comes to the Section 8 program. Lots of people are under the impression that if you rent to a Section 8 tenant, the government will somehow cover lost rent if the tenant leaves in the middle of the night or doesn’t fulfill the lease or damages your property. That’s not the case, and you’ll have to pursue the tenant for legal damages yourself. Also, you’re not going get more money than you would outside of Section 8. Some people think they can get away with charging the government $1,500 for an $800 rental home. The government does its research and they know what the market will charge for your rental home.

These are just a few things to consider before you decide to get involved in the Section 8 program. If you have any questions or you’d like additional information, please contact us at Title One Management.  

Insurance and Liability for Landlords in Atlanta, Georgia

FourandHalf Blog Post - Wednesday, June 18, 2014

Many landlords aren’t sure about what kind of insurance they need on their rental properties. There is a difference in the type of policy you need to have when you’re living in a home and when you’re renting it out. I am not a licensed insurance agent, but I can give you some advice based on our experience at Title One Management.

There is homeowner’s insurance and then there is landlord/fire insurance. The main difference is this: a homeowner’s policy will cover the contents of a property as well as the structure. A landlord policy will not cover the contents because you don’t have any contents belonging to you in the structure – those belong to the tenants. Therefore, the tenants need to get their own renter’s policy to cover those.

If you have a lot of properties that you rent out, you should consider buying a Business Owner Provider policy, or a BOP policy. This can provide a great savings to you when you have several investment properties. It generally works best when you have eight, nine or even 10 or more homes.

Another important thing to remember is that you’ll need to have your property manager included as an additional insured on your policy. People often include this with a lost payee clause and they think it means the property manager is going to get a check or a payout if you file a claim. That’s not what it means. Adding a property manager as an additional insured will protect the both of you if a tenant or someone should sue you. For example, if a tenant slips and falls and gets a lawyer, the lawyer is going to be anxious to sue everybody. When your property manager is an additional insured, you won’t have to cover that manager’s legal expenses because your policy will cover the defense of both of you. It’s important to add your property manager.

We always recommend you get a broad form policy. An insurance agent will know what that means. Essentially, it provides more coverage. It will include coverage for lost rent and it will give you full replacement cost instead of cash value. When you buy a policy that only provides cash value coverage, it means that the insurance company can depreciate the value of what you lose and pay you less than what it will cost to replace that item.

Finally, if you have a lot of exposure and multiple properties, think about an umbrella policy. This will give you an extra blanket of coverage when it comes to liability.

If you have any questions about insurance for your rental property, please contact us at Title One Management, and we’d be happy to help you.

Landlord Advice: Tenant Evictions in Atlanta

FourandHalf Blog Post - Tuesday, June 10, 2014

The eviction process in Georgia varies county by county. Everything from the procedure, the money required and the timeframe for eviction depends on where in Georgia your property is located. However, today we can provide a brief and generalized overview of what happens when you need to evict a tenant who isn’t paying rent. 

Usually, the eviction process starts because a tenant has stopped paying you. The first step is to try and contact the tenant so you can notify them that rent is due and they need to pay. When they don’t respond and they don’t pay, you need to file the eviction in whatever county your property is in. In some counties, you can do this online and in other counties, you are required to go to the courthouse in person. Pay the fees, which can be as little as less than $100 and climb up to several hundred dollars, depending on your location.

Once you have filed, the next step is serving the tenant with the court paperwork. This can be done through the court process server or a private processor. Sometimes a sheriff’s deputy or a constable will also serve the paperwork. Again, the process is county specific. In some cases, personal service will not occur and the tenant will be notified by the tack and mail process, which means the notice is tacked to the door and then mailed. 

In Georgia, a tenant has seven days after they are served to file an answer. If they do file an answer, the court will schedule a hearing. In some counties, you can have that court date almost immediately; within three or four days. In other counties, you’ll be waiting for two months or more. If the tenant does not respond and no answer is filed, the court will issue you a default judgment. 

Presuming you win that default judgment or you win your eviction case, you will get a Writ of Possession, which is the legal authority from the judge to regain possession of your property. That writ is processed through the sheriff or the constable or another entity responsible for this in your county.

Evictions can be complicated and as we’ve said a number of times, the process really depends on where in Georgia your property is located. If we can assist you, or if you have questions about eviction or you need more information, please contact us at Title One Management. 

How to Choose a Property Management Company in Atlanta

FourandHalf Blog Post - Tuesday, June 03, 2014

Choosing a property manager for your rental home is a big decision. Rental property is all about how it’s managed. Having someone who understands the business is a critical factor when you’re making a choice. You want someone who understands first-hand what it’s like. The best property managers own rental properties themselves. I’m always surprised when I talk to managers or agents who don’t own any property themselves. If they haven’t learned how to be a landlord themselves, it might be difficult for them to manage your property well. 

We also recommend finding out if you’re getting a full time property manager. You want someone who does nothing but management. When you have a sales agent who does property management as a side job between sales, you’re getting a different level of service. When you do something full time, you get really good at it. It’s an important piece of information to find out.

Look for a property manager who is committed to excellence. Designations are nice, but more important than those letters after a name is continuing education. Knowing how a property manager stays current in the field will give you a good idea of who you’re really dealing with. In Georgia, only 24 hours of continuing education are required every four years. That’s not nearly enough. For example, I have about 300 hours in the last three years. It’s so important to have someone who knows what they’re doing. Your property manager should be continuing his or her education on an ongoing basis. 

Interview a couple of property managers so you can find a good fit. Some landlords are very high touch, and they want to be called every week with an update. Other property owners don’t want to be bothered unless the house is burning down. You need a property manager who has a style that complements your own because you’ll be working together. 

Always ask how things are handled by the property manager. When you’re interviewing, find out what they do when they screen tenants, how they handle pets, what they do when there are maintenance issues. Find out what the procedure is when a tenant doesn’t pay. A good property manager will have a proven set of protocols in place. 

Get a feel for how the property manager operates and make sure it’s a good fit so you’re satisfied. If you have any questions about finding a good property manager, or you’d like to talk about our services, please contact us at Title One Management, and we’d be happy to help you.

What to Buy and Where to Buy Investment Property in Atlanta

FourandHalf Blog Post - Thursday, May 29, 2014
If you’re wondering what type of property you should be looking for as an investment property, there’s really not one single answer. It really depends on your investment objectives. There are specific guidelines you should follow if you’re interested in buying single family homes, however. After buying properties for more than 22 years, I can tell you what those are. I have purchased every type of rental you can imagine; from mobile homes to sprawling houses worth half a million dollars. 

The rental market in Atlanta does have a sweet spot, and your job as an investor is to find it. You want to buy a property that rents easily and will always be in high demand. In the Atlanta rental market, that home is a three bedroom house or larger. It should also have two bathrooms or more. You don’t want to buy a one bathroom home. Those houses are hard to rent. 

Ideally, you will buy a house that has no lead based paint issues. This means shopping for something that was built after 1978. In fact, we recommend buying something that isn’t any older than 20 years. You’ll have fewer problems with newer homes. Also, if you have a choice, choose a property that uses sewer instead of septic. There’s nothing wrong with septic properties, but it’s an extra maintenance issue for you and it could be an expense down the road. 

An investment portfolio should be balanced and diverse. For example, split level homes are great for rentals. There is a lot of square footage available, and they are popular and easy to rent.

The number one factor when looking at any property is location. Location is important, especially in this market. Buying something in a neighborhood is a good idea. Houses in established neighborhoods rent better than properties that are just out on a street somewhere. Even better are homes with HOAs. Look for swimming and tennis communities. Renters like to be in neighborhoods that are well taken care of. Location is critical to desirability. 

If you are looking at properties in different counties, make sure you are looking in areas that are pro-growth, pro-landlord and pro-eviction. You want to have your rental in place that makes it easy to evict. In some Georgia counties, you can spend months trying to get a bad tenant out of your house. In other counties, you can do it in less than 30 days. 

Finally, don’t buy in a neighborhood that you wouldn’t want to live in yourself. If there are bars on all the doors and windows and houses look trashed or people are gathering outside or on street corners when they should be at work, common sense should tell you not to buy a house there.

If you have any questions, please contact us at Title One Management. We’d be happy to assist you in buying just the right investment property. 

Professional Property Management vs. DIY in Atlanta

FourandHalf Blog Post - Wednesday, May 21, 2014

Today, we’d like to discuss why it might be smart to have a professional manager take care of your rental property instead of doing it yourself. The easiest way to think about this is to consider why you hire any professional. You hire someone else to cut your grass and service your transmission. You don’t want to operate on your own foot; instead you’ll go to a podiatrist. And sure, you could probably figure out how to fix your washing machine with a book and a couple of YouTube videos, but eventually you realize that professionals know their business. 

The same is true with property managers. The amount of time it would take you to do everything a property manager does and the expense you would incur is sizeable. You might think you’re saving money when you do it yourself, but you’re not. You also have to remember that anytime you have a professional working on your behalf, you get better results. 

Professional property managers don’t use leases from Office Depot. They have court-approved, attorney-tested bulletproof leases that have been in court hundreds of times. That really makes a difference because in this business, it’s all about your forms and your policies and procedures. As a do it yourself landlord, you probably won’t have any written policies and procedures, and that can get you in trouble. A professional property management will have them and they are there to protect you as a homeowner. 

A property manager will syndicate advertising, which means your house will get exposure on over a hundred websites. This is a far reaching advertising plan and in excess of what an individual could achieve doing it alone. Property managers get more results because of their economy of scale. When they list your home with hundreds of others, it’s a lot cheaper to get listed on those websites. 

Not only do we have a legal obligation to thoroughly screen tenants, it also makes good business sense. If you don’t make money, your property manager doesn’t make money, so there is no reason to put a deadbeat in your property. As a do it yourself landlord, you might not have the knowledge or the resources to screen for the things that property managers will. 

When your water heater bursts, you’ll probably pick up the phone and call a plumber. If that happens while your home is being managed by a property manager, you’ll have immediate access to an entire maintenance staff or a highly qualified vendor list. It will also be cheaper because property managers have negotiated pricing with vendors that brings in big discounts. 

A professional property manager will save you more money than they ever charge you. They’ll take care of all the things you don’t even notice or realize. If you have any questions or you’d like to talk about this further, please contact us at Title One Management.

Title One Management, LLC
GA Firm Lic # H-66924
Office: (678) 792-2050
Leasing: (678) 792-2046
Maintenance: (678) 905-8866

Physical Address:
1275 Shiloh Rd NW, Suite 2920
Kennesaw, GA 30144

Mailing Address:
PO BOX 2222
Cartersville GA, 30120

Copyright © Title One Management. All Rights Reserved. Contact Us
Powered by Property Manager Websites