Call us to learn how our program can take the worry out of owning rental property.
What is a Property Manager?
At Mallory Realty Company, Inc. our property managers are licensed REALTORS and members of the Troup County Board of Realtors as well as the Georgia Multiple Listing Service (GA MLS).
Our property managers are full-time managers.
Why is this important?
The real estate sales market is extremely competitive. Over the last several years, demand for housing has grown and supply has tightened. Many sales agents made a decision to supplement their sales income by small-scale rental management. As a landlord, dealing with someone who is only managing 5, 10 or 20 properties sounds good until you understand the differences between these part-time property managers and the kind we have at Mallory Realty Company.
To complicate matters even more, real estate sales and management have the same licensing requirements. Even though property management is very different from sales, a real estate license allows agents to do either, or both if desired.
We devote a tremendous amount of time and energy to staying current on rental laws and court practices. Agents who "do rentals" part-time just do not possess the experience of dealing daily with the issues or on such a grand scale of property like the ones we do. We currently manage over 500 properties ranging from single-family homes and apartments, to offices and commercial buildings. Most fair housing cases stem from rental situations. You never know when a well-meaning but inexperienced or under-educated sales agent and their landlord-client will be defendants in a fair housing case. Judgments in fair housing actions can range into the hundreds or thousands of dollars! A significant number of mold and lead based paint cases stem from rental activities and can result in huge awards to plaintiff/tenants.
Can you afford not to hire an experienced, professional property manager?
The bottom line: Experience and education count! Mallory Realty Company has the experience and resources to deal with situations quickly, efficiently, legally and with minimal exposure to liability for our property owners.
Why use Property Management?
A Rental Home is a big investment. With all the regulations, legal issues and liabilities, it is in your best interest to hire a professional property management company.
Mallory Realty Company has an experienced and dedicated professional staff, and the best accounting system available.
We are the largest single-family dwelling property management company in LaGrange, Georgia for a reason – we have the extensive, up-to-date property management services available in our market.
Finding the Right Tenant
First things first! Choosing a tenant is not an easy process. Landlords face a myriad of challenges in sorting through applicants. Among them, local, state and federal laws prohibit certain forms of discrimination and restrict the questions a landlord may ask of a prospective tenant and federal credit reporting laws restrict the fees a landlord may charge for a credit check and impose certain notification requirements on the landlord. These laws are complex and will not be dealt with here. Instead, this article will detail some hints so that landlords can find a "good" tenant.
WHAT MAKES A GOOD TENANT
In a word, a good tenant is "money". Money in the bank, money in the landlord’s and owners’ pocket, money saved from legal and other expenses. For a reputable landlord, the ideal tenant is one who pays rent like clockwork on the first of the month and is then forgotten for the next thirty days. That is not to say that a tenant that asks for repairs or who contacts a landlord is a bad tenant, as a good landlord will gladly address the routine requirements of a rental business. However, a tenant that breaks personal property, disturbs neighbors or does not pay rent is a bad tenant. This is the tenant that must be carefully screened out.
THE SCREENING PROCESS
The tenant screening process begins with a prospective tenant. To avoid claims of discrimination or disparate treatment, a landlord should treat all prospective tenants equally and employ an identical process when checking out rental applicants. A landlord should begin by having a filing system for applicants. This folder should contain all information regarding the prospective tenant’s information such as proof of income and photo identification. In all cases, a landlord should truthfully and carefully deal with a prospective tenant. The landlord should expect a truthful dealing back from the tenant. In most cases, a truthful tenant will opt not to rent from a dishonest landlord.
The place where the landlord most requires truthfulness from a prospective tenant is on the tenant’s rental application. All landlords should require written applications which should be completed by all prospective tenants. The landlord should carefully review the application. A potential tenant’s refusal to complete a written application is a sure sign of trouble and a landlord should not consider renting to that potential tenant. At a minimum, the application should request the following information from all prospective tenants over the age of 18 who will reside in the property: tenant full name (including middle name, maiden name, and aliases).
- tenant’s employer’s name and tenant’s monthly income
- tenant’s driver’s license number and social security number (the landlord should get a photocopy of the driver’s license)
- tenant’s date of birth
- tenant’s credit and bank information, including monthly debt payments
- a credit report authorization
- tenant’s automobile information including license plate number
- tenant’s rental history (at least the past four addresses where the tenant has resided, the time periods of residence, and the name and telephone number of the landlord)
- references (at least three to four references, including information on how long they have known the applicant and in what capacity)
The application should include a credit check authorization that informs the prospective tenant that the landlord intends to verify and check the information contained in the application. The authorization should include a sentence authorizing the landlord to obtain and verify any credit, employment and any other information, including that information contained on the application, from a credit reporting bureau in the form of a credit report, from the creditors directly, from the prospective tenant’s employers, and from the prospective tenant’s references and prior landlords.
CHECK FOR CONSISTENCY
Once a landlord has received a full application, the first step is to make sure the information is consistent. Does the name on the Driver’s license match the name on the application? Does the tenant’s signature look correct? Inconsistencies are not a guarantee of a problem, but can be an indicator. Are there gaps in the information? For instance, is there a gap of one year in the prior rental history? If so, the tenant may be trying to hide a landlord who the tenant does not want the landlord to contact.
THE CREDIT REPORT
Once a landlord has received a completed and signed application and credit authorization which looks promising and the landlord has checked references, employment and prior landlords, the landlord should find a credit reporting bureau and order a credit report. The report should be reviewed for a history of late payments, prior bankruptcies and outstanding debts. The report will not usually disclose prior evictions or landlord information because this information is rarely reported to these agencies, but it will give a landlord a general idea of a prospective tenants creditworthiness. If the credit report turns up a valid reason to reject a prospective tenant, the Fair Credit Reporting Act requires that the landlord notify the prospective tenant of such and inform the prospective tenant of the name and address of the credit reporting agency along with a notice that the prospective tenant can get a copy of the report if he or she files with the agent within sixty days of the landlord’s notice of rejection. Remember, if the landlord collects a fee for a credit report and does not obtain one, the money must be refunded to the applicant.
THE SECURITY DEPOSIT AND THE TENANTS ABILITY TO PAY
Landlords should try to make sure that tenants have the means to pay monthly rental obligations. To do this, a landlord should offset the prospective tenant’s income from the applicant’s other likely monthly obligations to make sure that the applicant can make the rent on a timely basis. Landlords should not assume that higher income equates to an ability to pay the rent. Plenty of high income tenants have large monthly obligations. An applicant with a lower income, no student loans, a fully paid automobile and less monthly debt may be more likely to pay on time than an applicant with a large income, a leased luxury car, student loan debt and a lot of other credit card borrowing.
Landlords should require, at a minimum, a security deposit equal to one month’s rent in advance of lease execution and possession up front along with the first month’s rent. This prevents the landlord from being without security against damages in the event that a tenant wrongfully fails to pay the final month’s rent and desires that the security deposit be applied to that obligation instead. In addition, any tenant who cannot provide at least the required deposit and the first month rent is unlikely to be able to pay on a timely basis. When accepting a security deposit, it is essential that the landlord provide a receipt for the deposit to the tenant (it should explicitly state the amount of the deposit) and the deposit should never be comingled with the landlord’s personal funds. The state of Georgia has strict rules regarding the procedures to be employed dealing with security deposits. A good landlord will seek out, understand and follow the law.
SET CRITERIA AND DECIDE
Before considering any applicant, the landlord should set some basic criteria that will guide the landlord’s decision making process. Criteria to consider are minimum income available for housing costs, maximum occupancy of the rental unit, minimum credit score, minimum history of stable employment, clean history regarding prior evictions or prior criminal conduct and any other criteria not prohibited by Fair Housing or other anti-discrimination laws. A landlord should make the decision to accept or deny an application based upon these criteria in all cases to prevent claims of discrimination. A landlord rejecting an applicant should clearly document the reasons and comply with any disclosure laws depending on the reason for denial. Landlords should not rush the decision to accept a tenant or be swayed by a prospective tenant’s "sob" stories. A comprehensive and uniform set of standards can help a landlord avoid making an irrational decision based upon emotion or financial need.
AFTER ACCEPTING THE TENANT
The single greatest mistake made by landlords is the failure to adequately screen a prospective tenant. A good tenant is a joy to deal with and is profitable to a landlord. A bad tenant can be a costly disaster. Many times, a landlord will lose focus when leasing an apartment. The landlord will accept security deposit payments in installments or even worse, require none at all. Some landlords have been known to accept a new tenant and turn over possession of an apartment without even a rent payment or security deposit. This is a disaster waiting to happen. A landlord may be so desperate to rent a property that any tenant with cash is acceptable. Most landlords who get into these unacceptable situations regret their actions down the line when they lose other tenants or lose rental income as a result of accepting a bad tenant. Property ownership is a business and should be treated that way. Landlords provide a service to tenants. Through adequate screening, a landlord can significantly cut the risk of trouble tenants and costly procedures down the road. This is the key foundation to successful operation of a rental property. We provide that for you here at Mallory Realty Company!
Property Management Services
Our company has been in business managing rental property for over 100 years. Being around for over 100 years we have seen it all in good times and bad, and we know what it takes to not only survive but how to grow and sustain your property value.
We will keep you informed of any maintenance needs for your property. Invoices will be included with your monthly statements for charges or minor maintenance items. You will not be bothered with minor issues.
- Credit checks available on all tenants
- Employment verification
- Rent to Income verification
- Signs posted on house/in yard
- List of available properties given to our numerous walk-in customers
- Rental list on our web page and selected property on GA MLS
- Prepare and execute leases
- Ensure compliance with lease terms
- Monitor and enforce rent increases
- Update records on an ongoing basis
- Respond to concerns and inquiries of owner and tenant
- Coordinate eviction proceeding as required
- We represent you in magistrate court
- We send you monthly check with itemized statement
- Year end statements for your account
On-Line Owner Portal
We offer our owners who have internet access and an email address the ability to go on-line to our web page using our owner portal for the following:
- View your monthly statements, bills and reports
- Review and approve your work order request
- Automatic notification of work orders by email
- Automatic notification when your property is rented by email
- Email us with a question / problem via the portal
- View letters and other documents sent to you
- Rent is due when rented
- Late notices are sent to all tenants in arrear
- Evictions are filed as required/requested by landlord
- On call maintenance person for emergency repairs
- Tenants call us for all repairs
- Rapid response to repair and maintenance needs
- Office hours are 8:30am to 5pm Monday-Wednesday, 8:30am to 5:30pm Thursday and Friday
- Closed Saturday and Sunday
Our Application Process
Mallory Realty Company, Inc. is committed to providing reasonably priced and well-maintained properties to fit all budgets while doing our utmost to select good paying tenants that will care for your property. Part of this commitment is in the application process. We strive to gain as much information from our applicants in order to make an informed decision on selecting the best prospective tenant for your property. We will require the following information for our application:
- Fill out the application form online or in our office
- A credit report may be obtained for selected properties
- Credit checks require a $20.00 non-refundable fee
- Applicant must show proof of income by pay stub or government agency letter
- Employment history and income will be verified
- Income must be at least 3 times the monthly rental rate
- Some properties may require 4 times the monthly rate
- Applicant must present a valid Georgia or other State driver’s license or other photo ID and a Social Security card
- Rental history will be verified by previous landlords
Application may be denied if:
- If applicant misrepresents any information on their application
- If applicant’s credit report shows their accounts are not current
- If applicant’s rental history shows prior complaints of evictions
- If applicant’s income is not sufficient
- If applicant filed for bankruptcy in the last two years
We reserve the right to charge additional deposits, based on applicants’ credit scores, at our discretion.
Other Landlord Questions / Issues
Pets – Should you allow them?
Roughly, 50% of tenants have a pet of some kind. Denying pets reduces your pool of potential renters.
- Pet owners are normally required to provide additional security deposits.
- Pet owners may stay longer as other property available to them is limited.
- Two or more pets can actually be better than one – since they provide companionship for each other and are less likely to cause damage due to boredom or anxiety.
- Pets can create odor and damage problems if not properly supervised by their owners.
- Items such as carpet generally require more frequent replacement in pet friendly properties.
- It can be difficult to obtain reliable references on pets from former property owners.
- Pet damages sometimes exceed the amount of deposits and it can be difficult to recover the excess from former tenants.
As with most such issues, each case is different and comes with its own set of risk versus reward considerations. The following are some factors to consider in making your decision:
- Do you have pets or have pets previously been in the property?
- Does the property have older carpet?
- Do you intend to occupy the property yourself at some point? Would you likely upgrade many items in that process anyway?
- Do you have allergies that might be aggravated by pet odor/dander?
- Would allowing pets provide significant reduction in projected market times?
Landlord Frequently Asked Questions
Q: What do I get for my monthly management fee?
A: Among other things, your management fee buys:
- The market presence and reputation of Mallory Realty Company.
- Rent collection and tenant relations.
- The expertise of one of the best property management teams in the area.
- Professionally crafted and legally tested leases and related documents.
- Peace of mind.
Q; How long will it take to rent my property?
A: Many factors affect the speed with which a property rents including supply/demand, time of year, location and condition. Your property manager will recommend a market rent based on these factors.
Q: Why do property management companies charge leasing commissions? How are these different from management fees?
A: Management fees pay the managing company and your property manager for the day-to-day tasks associated with conducting your rental business. If approved or requested, Leasing commissions are offered through the GA MLS as an inducement to get the property marketed and shown. Our goal is to maximize exposure for your property and encourage all real estate agents (who number in the thousands) to bring qualified tenants to the table. This is accomplished by offering a leasing commission or "finder’s fee" to the agent who markets the property and the agent who brings the tenant to the table.
Q: I interviewed several managers and found a lot of variation in fees. Why is that?
A: Real estate companies operate completely independently of one another and set their fees according to what they consider reasonable returns for their efforts. There are no "standard" fees for particular services. At Mallory Realty Company, the emphasis is on quality and we work hard to find the right tenant for you and earn your trust. We believe our program provides excellent value to our investment property owners. Our philosophy is to gain market share by consistently delivering an exceptional range of services to our landlords and tenants.
Q: My property manager has suggested that I paint, replace a few rooms of carpet, and have the house power washed before placing it on the rental market. I’m not selling. Why should I go to all this trouble and expense for tenants?
A: A well-maintained property attracts better tenants, leases in a shorter time, and generally brings higher rents. Well-qualified tenants realize they are sought after and shop homes that are in good condition and offer the best value for their rent dollars. The money you "save" by not having the property in top condition will be spent on longer vacancies and the problems associated with attracting lesser qualified tenants.
Real estate has created more self made millionaires than literally any other investment available in today’s society. Whether you are looking to purchase rental properties, or you are looking to rehab properties for quick profit – real estate investing can put profit in your pocket.
With the decline of mutual funds and constant fluctuation in the stock market, it is more apparent now than ever that real estate is a much more desired investment.
There are several reasons why investment properties are the best investment out there.
When compared to stocks, bonds and money market accounts, real estate is by far the most profitable investment. What kind of return is 2% – 7% (not a very good one). With real estate you can invest a small amount of your own capital while reaping large rewards.
Equity is the difference between what you owe on a property and what the property is worth. Equity may be accessed when you sell a property or when you refinance the property. It may be used to pay off higher interest loans, to reinvest or any other reason you see fit.
If you buy the right property for the right price you should have equity the day you buy it.
Over time real estate goes up in value. In recent years the value of real estate has increased at dramatic rates. Buy a property low today and receive equity through time.
If you are purchasing a rental property, one of the major considerations you must take into account is the amount of cash flow this property generates. This is the difference between how much this property brings in each month and the amount of money the property costs you per month to own and operate. A good rental will pay for itself while putting extra cash into the owners pocket each month.
Real estate provides many tax benefits that include tax write offs, business expenses, value appreciation, tax depreciation, tax shelters, IRA benefits, tax exchanges, etc . . . Consult an experienced real estate tax accountant to see what benefits you can take advantage of.
10 Tips to Reduce the Vacancy Rate of Your Rental Property
Vacancy is the bane of every landlord’s existence. If the vacancy persists, you may be unable to make your mortgage payment. While there are many things that can lead to high vacancy rates, there are specific steps you can take to reduce the vacancy rate of your rental property.
1. Keep it clean. A clean dwelling is a place where people will want to live. If the common areas of your rental property are filthy or unkempt, it will give people a bad impression of your property. If your current tenants are contributing to this problem, set some basic rules for cleanliness of the units.
2. Make timely repairs. One of the most common reasons for vacancy is infrequent or nonexistent repairs. Invest the time and the money that is necessary to keep your rental units operating in top condition.
3. Spruce up the exterior. In addition to keeping your rental dwellings clean, you need to frequently paint or otherwise maintain the exterior. If a dwelling looks shoddy, people will not want to live there. Landscaping is also very important in attracting and keeping new tenants. Even though you may not live at your rental property, try to make it as "homey" as possible.
4. Research local rent prices. If you are finding that your tenants are not staying past their lease, you may be charging too much rent or raising rent costs too much at the end of the lease term. Find out what your competitors are charging to see if you can offer your tenants a better deal.
5. Reward existing tenants. The best way to keep a tenant happy is to not raise the rent. Although you may need to increase rent over time, try to avoid this for as long as you can. This will encourage your tenants to stick with you and decrease the number of people leaving to find a better deal.
6. Provide Amenities. Consider providing amenities such as washer-dryers, updated appliances, garbage disposals and the like.
7. Offer paid utilities. Even a bill as small as $25 a month can seem like a lot to someone who needs to find a cheaper place to live. Offering paid heat or water can be a great way for landlords to attract new tenants and retain their existing ones.
8. Offer incentives. If a large number of tenants are leaving, offer them an incentive to stay. For example, if they sign another six-month lease, offer them a reduction in one month’s rent. You can also try offering free gifts with a new rental, such as household appliances.
9. Look at your neighborhood. If your rental property is not in the best part of town, add a security system so that your tenants feel safer. Not only will this help keep your tenants safe, but it will also let them know that you care about their safety and well-being.
10. Get to know your tenants. Instead of being a feared Machiavellian landlord, try to make friends with your tenants. It is a lot harder to leave a friend’s house than it is to leave a rental dwelling run by someone you don’t know or don’t like. Take the time to learn more about your tenants and do your best to make them feel at home.
These are just a few suggestions to help you keep your current tenants happy. Your individual situation may call for some different ideas, but this list will get you started on your way to a full rental property that is profitable and a joy to run and own.
What is "Market Rent" for my investment property?
Market Rent is the level at which other similar properties are renting, with adjustments for time of year, condition, location and improvements. We use the Georgia Multiple Listing Service (GA MLS), experience in their market areas, internet listings and contacts with other managers and agents to determine a competitive price for your property. A well maintained rental offered at a fair market price will attract good tenants and rent faster. Well qualified tenants understand they are in demand and shop to get the best value for their rent dollars. You can’t overprice your property to offset a high interest mortgage payment or other expenses – it simply won’t rent. Market rent has no relationship to ownership expenses.
Negative cash flow in the first few years of ownership is not unusual. However, when you consider the tax advantages of owning rental real estate, including the fact that depreciation and expenses (including management fees) are deductible, the net result is frequently positive – particularly as the property value and market rents increase over time.
Some factors that affect price are:
- General appearance. Does your rental property have "curb appeal"?
- Interior features. Are the appliances, cabinets and other fixtures and systems in the house fully functional, attractive and well maintained?
- Is the property in a desirable location? ?How about schools? Access to shopping? Commuting distances?
- Central heat and air? Multiple baths? Amenities?
- Is the paint and flooring in very good to new condition to entice top quality tenants?
CALL US TODAY TO FIND OUT HOW WE CAN HELP YOU MANAGE YOUR PROPERTY!