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Property Management Blog

How Tenants Get Fake References

Web Admin - Tuesday, October 11, 2016
With the onset of internet access, our society is being inundated with services to fix any problem.  Take a poor work history, if you are trying to land a job and need to beef up your resume due to a firing or a gap in work history, you can contact one of several companies that will help you create a fictional work history.  For a fee, they will create a website for your fictional prior employer.  They will set up an internet phone number,  staff the number with a person trained to answer questions about you and your so called history with that fake company, and make your reference follow-up  just like any other employer.

You can also use this process to deceive potential landlords.  These companies will set up a fictional property manager website and a fictional phone number via the internet for any area code you desire. They will work with you to develop a detailed history and then rehearse it with you so that there are little to no flaws in both of the stories.  When a landlord calls the reference number given, they are greeted by a worker who has a complete packet of information regarding your former tenancy with them.  

At Compass Property Management Group, we take numerous steps to weed out the liars and problem tenants.  We base a lot of our emphasis on applicant credit histories.  We also check social media where you can often find employment information and determine if the prospect has pets.  For landlord reference checks, we review property tax records for owner information to verify if the submitted information is correct.  When contacting the reference we ask multiple questions designed to verify the reference such as:  when was the potential tenant's prior home purchased and for how much, what other homes does the owner own in the area, what is the average rental price in the area, how many beds and baths in the potential tenant's prior home.  These types of questions will stump relatives posing as prior landlords.  

Professional reference companies rarely conduct such in depth research.  Some of them do, but an added safety measure is carefully checking credit histories to create a higher level of protection.  It is impossible to weed out all problem tenants, but taking the above steps will significantly reduce the risks.

Why Can't My Tenant Pay the Rent?

Web Admin - Saturday, September 17, 2016
Low priced housing investments can be a great deal.  The upfront costs are lower, maintenance costs are lower and houses in this price range move quickly as most low-income families are forced to rent.  

The downside of low priced housing is that you generally deal with tenants who live from paycheck to paycheck and any unexpected costs can knock their budgets completely out of whack.  When living on a tight budget, families barely cover monthly costs leaving little ability to save for extras or emergencies.  

The budget killers:

Christmas:  When Christmas rolls around, families struggle to buy the special foods our society requires, let alone the new bicycle that little Johnny has been hinting about for months.  All families want to provide for their children.  When there is little extra money and the Walmart layaway plan is costing more than a person thought it would the first crisis to address is getting the Santa haul out of layaway.  Rent can be dealt with later.  Of course it makes sense to handle your housing needs first.  But when income is limited and you want to make your child feel special, sometimes a person pushes aside the necessities for a little sunshine.

School:  Another budget cruncher is getting children ready for school.  This involves buying clothes to replace the ones Johnny grew out of over the summer, providing everyday and sports shoes, and making sure Johnny has a coat to protect him through the winter months.  And after all of these costs, the parent must also buy all the items on the teacher's list for each child.  A real budget buster.

Birthdays:  Low income parents, like all parents, want to see their child smile on their birthday.  While rent should always be paid first, sometimes buying for your child's special day is the immediate need.

Crises:  All through the year things happen that create a financial crisis.  Johnny cracks a tooth during football practice, requiring an unexpected visit to the dentist.  This may involve a co-pay.  But if the tenant is uninsured it will cost much more.   In addition, a parent has to take off work to take the child to the dentist.  Most lower income families don't have medical insurance, so in addition to the medical costs, they have also lost a day of pay.  This situation is repeated whenever a medical emergency happens.  And even when there isn't an overt crisis, the family budget can be strained when a child is sick and no one else can take care of them while the parent works.  There goes a day or two of pay.

In the property management field the first order of business when rent is not paid is often to file for an eviction and try to scare a tenant into paying the rent.  Sometimes this works.  Sometimes the tenant can seek assistance from churches or other agencies.  But if you are dealing with a long term tenant who rarely gets behind, this may not be the best option for you or the tenant.  Even if you work out a payment agreement at court, the tenant now has the additional charges of the eviction costs, which can ruin their budget for months.  To avoid turnover and marketing costs it may make more sense to work out a payment plan with the tenant and avoid the court costs.  Your budget will be happier and your tenant will feel an affinity with you that may carry you through years of uninterrupted tenancy.

Criminal Background Checks: What is Legal, What Will Get You in Trouble

Web Admin - Monday, April 18, 2016

Discrimination in and of itself is not illegal.  Where landlords face penalties is when discrimination is not practiced across the board.  For example, if your company consistently runs background checks on every applicant and denies housing to all applicants with criminal convictions you are practicing a form of discrimination that currently has no consequences.  However, if your company only runs background checks on people of color and rents to a white person with a similar criminal history, you face penalties and possible lawsuits under the Fair Housing Act which protects certain classes of people from discrimination.  Currently those classes are defined as: race, ethnicity, religion, familial status and disability.  Some states and municipalities also include gender and sexual orientation.  These additions fluctuate across the Metro Atlanta area so check with your local ordinances.

There is confusion in the housing industry about whether new rules will create liability when discriminating against those with criminal histories.  While persons with criminal histories are not a protected class, people of color are disproportionately represented in the group of people with criminal histories.  Through this door, landlords may face liability.  There are no current rulings to clarify this, but it may well come up in the near future.  Check back for further updates.

How do you protect yourself and your property? 

1) Be consistent with your background checks.  Perform them on all applicants, or on none. 

2) Be consistent with your denials.  If you approve a white male applicant who has a prior drug conviction, you must approve all applicants with drug convictions. 

3) Set clear guidelines.  Set a timeframe for allowing convictions and be consistent across the board with that timeframe.

If you put in policies for consistent handling of applicants and train your staff on these policies, you put in place the needed documentation for protection if and when the law changes.

Curb Appeal: How to Make Your Rental Property Stand Out From the Pack

Web Admin - Monday, May 18, 2015

Great first impressions won't get you the renter.  But they will get the prospective renter in the door.  With the internet allowing for a wide variety of rental options, getting the renter in the door is half the battle.  How do you make this happen?  Do a visual audit of your property.  Take a look at your property from the street.  Is the house visible from the street?  Is the yard well maintained?  Is the entryway appealing?  How will your marketing pictures look on the internet?

Be honest with yourself.  Would you rent this property?  If not, what could change your mind?  Would a new coat of paint on the front door brighten the entryway?  A contrasting color on the front door can brighten up an otherwise drab house.  Is the porch clean and crisp looking, or could it use a pressure wash, or coat of paint?  You would be amazed at how cheap, yet effective a pressure washing can be to a well worn house, making it sparkle.

House numbers:  Make your house easy to find and increase its appeal.  Place house numbers in an easy to see area.  Use numbers that fit the style of the house and keep the size between 4" to 6" for clear visibility without overwhelming the house.

Blinds:  If your house has blinds, or window treatments, look at them from the street.  Are they consistent throughout the front of the house?  If not, either add or subtract so they are.  Consistent window treatments add a lot to how inviting the house is.

Is the trim worn out and in need of replacement, or would a coat of paint give it enough interest and depth to lure in potential renters.

Stage your marketing pictures.  Potted plants can add a homey feel, allowing a prospect to envision what their own personal touch may add.  When taking your marketing pictures, bring a couple of flowering pots to place on either side of the entryway.  While it may not be practical to leave the pots there if you cannot get back out to water regularly, it will at least add to the marketing pictures.  If you can't water regularly, don't leave the pots.  Nothing will turn off potential renters than dying plants at the entryway.

With websites first impressions aren't everything in the rental market.  But they are the beginning of everything.  When a prospective renter is browsing through the rental websites, first impressions are what cause them to click onto your property.  So make that initial introduction to your house the one that makes renters pick up the phone.

New Water Heater Regulations and What That Means for Property Owners

Web Admin - Monday, May 04, 2015

The Department of Energy has recently updated the regulations for water heaters.  The required changes can wreak havoc on budgets for owners of multiple rental properties.  If your properties have water heaters that need to be replaced in the next few years, now is the time to do so. 

Manufacturers are under orders to make changes to the basic design that will increase energy efficiency.  New water heaters will reflect the higher cost of these design changes costing 25% to 30% more.   The energy efficiency will cut down on long-term fuel costs.  But those savings will be pocketed by your tenants if they pay the fuel bills.

The initial cost of a new water heater is not the only consideration.  Installation drives the cost up much further.  With the size increase of about 2 inches in height and width, many homes will necessitate a relocation of the heater as the current water heater closet will not accommodate the new designs. If your current water heaters are in a small closet or tight attic space, you may have to create a new space for the larger designs.  This may necessitate not only a change in space, but also the cost of plumbing that new space. 

Water heaters that have already been shipped to your local box stores will continue to be sold for the time being.  But once they run out, the new designs will be all that is left.  For any home with a dated water heater that will have to be replaced soon, replace it now.

See the new Department of Energy standards below.

§ 430.32 Energy and water conservation
standards and their effective
(d) Water heaters. The energy factor
of water heaters shall not be less than
the following for products manufactured
on or after the indicated dates.
Product class Energy factor as of January
20, 2004 Energy factor as of April 16, 2015
Gas-fired Water Heater ............ 0.67\(0.0019 × Rated Storage
Volume in gallons).
For tanks with a Rated Storage Volume at or below 55 gallons:
EF = 0.675\(0.0015 × Rated Storage Volume in gallons).
For tanks with a Rated Storage Volume above 55 gallons:
EF = 0.8012\(0.00078 × Rated Storage Volume in gallons).
Oil-fired Water Heater .............. 0.59\(0.0019 × Rated Storage
Volume in gallons).
EF = 0.68\(0.0019 × Rated Storage Volume in gallons).
Electric Water Heater ............... 0.97\(0.00132 × Rated Storage
Volume in gallons).
For tanks with a Rated Storage Volume at or below 55 gallons:
EF = 0.960\(0.0003 × Rated Storage Volume in gallons).
For tanks with a Rated Storage Volume above 55 gallons:
EF = 2.057\(0.00113 × Rated Storage Volume in gallons).
Tabletop Water Heater ............. 0.93\(0.00132 × Rated Storage
Volume in gallons).
EF = 0.93\(0.00132 × Rated Storage Volume in gallons).
Instantaneous Gas-fired Water
0.62\(0.0019 × Rated Storage
Volume in gallons).
EF = 0.82\(0.0019 × Rated Storage Volume in gallons).
Instantaneous Electric Water
0.93\(0.00132 × Rated Storage
Volume in gallons).
EF = 0.93\(0.00132 × Rated Storage Volume in gallons).
Note: The Rated Storage Volume equals the water storage capacity of a water heater, in gallons, as specified by the

How to Find an Ideal Rental Property

Web Admin - Wednesday, April 08, 2015

When diving into the world of rental property the first step is to determine the price line you want to work with.  Homes in higher priced neighborhoods will increase the probability of attracting financially secure, long-term tenants meaning lower turn-over, less time the property sits vacant and lower renovation costs.  But higher priced homes may be beyond your planned price range.  Even if the initial cost is within your budget, make sure you also evaluate the costs of property taxes (check with the local tax commissioner's office), insurance, and what higher income tenants will expect in the way of repairs.  Will your rental income cover your projected costs and allow a margin of profit?  Keep in mind the resale value of a higher end home when calculating your potential profit.  If you are looking for a short term investment, resale value is an important consideration.


If lower priced neighborhoods are more in line with your initial budget, evaluate the long term costs and the resale potential.  The initial cost can be lower in depressed neighborhoods.  Renovation costs will be cheaper as you can use lower end product, and taxes (if you shop carefully) can be significantly lower.  But working with lower income tenants comes with its own risks. You will face more eviction costs and higher turn-over costs with tenants who often live paycheck to paycheck.  When the time comes to sell your property you may be shocked by the lower value of the property due to the lack of care given by higher turnover tenants.  Compare the potential income derived during the time you rent the property with the likely cheaper, but on-going expenses.  If you are in this for the long haul, a lower-end property may well be worth it.


If you have determined a higher end home is the best choice for you, the next step is to find a home that will attract a stable, long-term tenant.  For many higher income prospects the biggest issue will be the local school district.  Check online for local school ratings to narrow the neighborhood you choose.  Second, check commute routes, especially in metro areas.  Is the neighborhood close to interstates?  Is access to downtown areas snarled with traffic on a regular basis, or is traffic flow relatively easy?  Third, what amenities does the neighborhood offer?  Is there a park nearby?  How about an upscale shopping mall?  Gyms?  While these are not required, they can help when marketing the property.  Fourth, what is the crime rate in this area?  Is the home close to low-end apartment complexes and busy intersections? Or is it in a well-defined neighborhood that has limited access for cut through drivers and foot traffic?  How often do police respond to crime in this neighborhood?  And fifth, what is the local picture on vacancies and current listings?  If the neighborhood has a lot of vacancies, you will not be able to command a higher rent rate due to competition.


When choosing to buy in a lower income area, check for these issues:  Is the house on the bus line?  Is the neighborhood safe?  (This can be checked by a visual inspection of the neighborhood, a call to the police department and checking on-line for crime statistics.)  What do the surrounding houses look like?  Are there burglar bars throughout the neighborhood?  Lower income tenants have likely dealt with high crime in the past and will be looking for a safe neighborhood for their families.  Again, check the vacancy rate so you don't find yourself up against a lot of competition, thereby commanding a lower rental rate.


If you have decided to focus on low-end rentals, be aware that tenants will struggle to pay rent due to a myriad of issues.  The most difficult times for lower income tenants are the beginning of the school year when children need new clothing and school supplies, and Christmas when the focus of income is on buying gifts.  Consider giving a discount on rent in September if rent is paid on time for August and September and in January if December and January rents are paid on time.  


Other struggles your low income tenants may encounter include: unexpected medical expenses, car repairs and illnesses that keep tenants from working, thereby lowering their income.  These are harder to prepare for.  But you can establish a program where renters who pay on time for 12 months can get a partial month of free rent when needed.  Your tenants will love you for it and you may be able to avoid an eviction filing and associated renovation costs.


Now before you go out there and evaluate properties there is one more thing to consider.  Will you manage your own property or use a management company such as Compass Property Management Group (compassrent.com).  If you manage your own property you will want to choose property close to where you live for ease of service.  With a management company, this will not be a concern.


To recap:


Things to evaluate:
1)  Property cost
2)  Property taxes
3)  Insurance costs
4)  Potential maintenance costs
5)  Profit margin
6)  Short or long term investment
7)  Neighborhood listings and vacancies
Marketing considerations:
1)  School system
2)  Access to interstates and downtown areas
3)  For lower income homes:  access to public transportation
3)  Amenities: malls, parks, etc.
4)  Crime rates
Bonuses for higher end homes:
1)  Lower turn-over with more stable tenants
2)  Less time property is vacant
3)  Lower renovation costs over the long-term
4)  Higher rent
5)  Resale value

Bonuses  for lower priced homes:
1)  Lower initial investment
2)  Lower maintenance costs
3)  Lower renovation costs over short-term
4)  Lower tax rates (varies, need to check)

Downside for higher end homes:
1)  Higher initial investment
2)  Higher renovation costs short term
3)  Higher tax rate (potentially)
4)  More demanding tenants

Downside for lower priced homes:
1) Higher turnover with less stable tenants
2) Higher eviction rate
3) Higher renovation costs over long-term
4) Lowered value over time (also depends on neighborhood changes)

Cut Your Long-Term Maintenance Costs

Web Admin - Monday, March 16, 2015

When property owners focus on keeping maintenance costs down by doing repairs only as needed, they can face more costly repairs in the long run. Being proactive with repairs  can save you money and preserve your property's worth.

Most landlords perform maintenance tasks in response to tenant complaints or during turnover.  Yet some minor problems aren't noticed by long-term tenants and if left unattended can lead to expensive repairs.  By scheduling biyearly inspections, you can find and repair small problems before they become bigger.  

Take for example a leaking roof.  Undetected, this problem can easily escalate causing damage to interior walls, electrical wiring and structural damage.  It can also lead to mold.  This one small problem can lead to thousands of dollars in repair costs.  Whereas a regularly inspected roof can be repaired cheaply before any interior damage can occur.

To detect small problems before they become bigger, consider scheduling an inspection on your property in the Spring and Fall.  The inspection should cover the following items:

  1. Roof: Inspect the roof and flashing and do repairs while they are minor.
  2. HVAC: Change the filter and have the system inspected in the Spring and Fall.  Regular maintenance will help you get the full use of your system.  A biyearly inspection and maintenance charge is much less costly than replacing the system and will keep your tenants happy.  Happy tenants are long term tenants, saving in renovation and marketing costs.
  3. Gutters: Many property owners don't want to invest in the cost of gutters, much less gutter guards.  Yet these can save in costly repairs.  Gutters funnel water away from the unit helping to keep the basement and crawlspace dry and mold free. Regular inspections will alert you to any damage to the gutters or downspouts.  It will also let you know if the gutters need cleaning to prevent  water from backing up into the roof. Consider installing guards for your gutters at properties that have a lot of trees. This expense will pay for itself over time by reducing the need for cleaning. 
  4. Caulking: Inspect the caulking on exterior windows and ensure the seals are still intact. Caulking deteriorates over time and must be replaced to keep the elements out and keep your sills from rotting.  Also inspect the caulking around the tubs and sinks and repair as needed.  This will keep water from leaking behind walls causing mold and compromising the wood.
  5. Water Heaters: Inspect, drain and descale water heaters:  Water heaters have the potential to create high cost repairs.  Checking every couple of years will help ensure the water heater works correctly and doesn't leak causing damage to expensive flooring and leading to mold damage.

You are in this to make money. By keeping your home in good condition, your tenants will be happier and stay longer, your repairs will be minor and when you are ready to sell, your home will command a higher price.

Compass Property Management Group, LLC
1275 Shiloh Rd Suite 2950
Kennesaw, Ga 30144
Phone: (404) 445-7770
Fax: (678) 496-3395
E-mail: Rent@CompassRent.com
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Compass Property Management Group, LLC, Property Management, Kennesaw, GA