678-825-0500

Excalibur Home Management Blog

Atlanta Property Management: Shadow Inventory Update 2014

Mike Nelson - Tuesday, April 29, 2014


According to Zelman & Associates’ research analysts, shadow inventory is down 35% from its’ peak as of 3Q08, and down 18% year over year, as of 3Q13. 

To understand this, in context, let’s start by defining Shadow Inventory before discussing the affects that Shadow Inventory has on the real estate market.

What is Shadow Inventory?

Investopedia.com defines Shadow Inventory as:

“… real estate properties that are either in foreclosure and have not yet been sold or homes that owners are delaying putting on the market until prices improve. Shadow inventory can create uncertainty about the best time to sell (for owners) and when a local market can expect full recovery. Also, shadow inventory typically causes reported data on housing inventory to understate the actual number of inventory in the market.”

How does Shadow Inventory affect the real estate market?

During the subprime mortgage meltdown and overall housing market collapse of 2007-2008, lenders were left with a tremendous amount real estate holdings. Most lenders were slow to put their inventory up for sale. Why? They were afraid that by flooding the market, prices would be driven down. This, in turn, would have significantly lowered their potential Return on Investment.
 
What is the state of today’s market?

Although shadow inventory is down 35% from the peak as of 3Q13, there are still approximately 1.8 million homes that remain in some form of foreclosure or delinquency above a normalized level. 

Zelman & Associates believes that “the flow of distressed properties into REO and the pace at which those properties exit REO is the most important relationship to be analyzed when monitoring shadow inventory and the impact on price.”

Default notices are down 11% year over year. NODs (Notice of Default) are down more than 80% from their peak. Year over year, REO filings were down 42% in key default states and 43% in key auction states, according to Zelman & Associates.

Default notices, REO filings, and REO for-sale listings—various measures across the scope of the foreclosure market—are all showing positive signs of year over year improvement and the additional supply of foreclosures coming to market continues to dwindle. 


Or, click here for more information regarding the Leasing & Management services that Excalibur offers throughout all of metro Atlanta.

Landlord-Tenant Law in Georgia: Security Deposits

Mike Nelson - Monday, April 21, 2014


Disclaimer – We are not attorneys and we are not trying to provide you with legal advice.  We are trying to provide you with a ready reference to Georgia law regarding the landlord tenant relationship and share some techniques our company uses to comply with those laws. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.  If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.  You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.  We encourage you to read the code for yourself and consult your own attorney before making any final decisions regarding your actions.

If you own or manage rental houses in Georgia, it would be a good idea to review 44-7-31, 44-7-33, 44-7-34, 44-7-35, and 44-7-36.  

Let’s start with 44-7-36 which says “Code Sections 44-7-31, 44-7-32, 44-7-33, and 44-7-35 shall not apply to rental units which are owned by a natural person if such natural person, his or her spouse, and his or her minor children collectively own ten or fewer rental units …”.  First take note of the word “units”.  Two quadruplexes and a duplex equal 10 units.  It does not say 10 properties.  Second note the term “natural person”.  Neither an LLC nor a corporation are a natural person.  Many landlords choose to place their properties in the name of an LLC or corporation to reduce liability.  While that could be a very good idea, it also makes the landlord subject to all of the security deposit requirements of a licensed broker as listed in the other code sections.  


Under 44-7-31 you are required to keep the security deposit in a separate trust account in a bank that offers insured deposits (like FDIC) and you must notify the tenant which bank is holding their deposit.  


44-7-33 contains many more requirements and I urge you to read thru it carefully.  To start, you must provide the tenant with a copy of the move in inspection before accepting their security deposit.  Many landlords, and some property managers, will provide the tenant with a blank copy of the move in inspection and tell the tenant to complete the inspection and return it to the landlord or agent.  Their thinking is, “if the tenant never returns the inspection, when they move out I can write up whatever damages I want”.  That thinking is 180 degrees off. If you charge the tenant for damages at move out, and the tenant takes you to court under a Wrongfully Withholding the Security Deposit complaint, one of the first things the judge is going to want to see is the move in and move out inspection.  If the landlord can’t produce the move in inspection, it is highly likely that the judge will disallow any charges to the security deposit for damages because the landlord can’t prove that the property wasn’t in that condition at the time of the move in inspection.  So it is very important that the landlord perform a written move in inspection before the tenant moves in.


Second, 44-7-33 requires the landlord (or their agent) to perform the move out inspection within 3 business days of the termination of the occupancy.  It goes in to say “and compile a comprehensive list of any damage done to the premises which is the basis for any charge against the security deposit and the estimated dollar value of such damage.”  So at the time you perform the move out inspection, not only do you need to note anything that you consider tenant damage, you also have to note your estimate for the amount of the damage.  Be prepared for your tenant to dispute your “estimate”.  

TECHNIQUE:  When you meet the tenant to perform the move out inspection, let them know in advance that you are going to note anything that is wrong with the property.  Inform them that they should wait until you are done to discuss any issues because, while you are noting the condition of the property, you are not necessarily saying they are liable for the work to be done.  Some of your notations may be related to wear and tear issues.  When you do note issues that you believe are related to tenant damage, start by showing the tenant that the issue was not noted that way on the move in inspection.  Explain to the tenant that since you are not a contractor you are going to estimate the cost to repair on the high side at this inspection appointment.  Once you get the contractors invoice for the work, before returning the balance of the security deposit, then you can reduce the amount of the charge and increase the amount of the refund.  But judges do not like to see landlords increase the amount of the charge after the move out inspection.  By explaining these things to your tenant in advance you will reduce the number and intensity of the disputes you might have otherwise.  


44-7-34 applies to ALL landlords.  In short, after the tenant vacates the property you have one month (30 calendar days) to return the security deposit and/or your statement detailing any deductions made from the deposit for damages that are a result of the tenant’s abuse or neglect of the property or unpaid charges.  You can’t charge the tenant for normal wear & tear (separate BLOG post).  The deposit may also have been applied toward unpaid rent.  Just make sure you include your accounting statement with the letter and any applicable refund check.  Make sure you get the letter and any applicable refund out on time or 44-7-35 may become applicable.  If you mail a refund to the tenant, and the tenant does not cash the check for 90 days, then that money just became the landlord’s under 44-7-34 (Georgia is a great place to own rental property!)


44-7-35 doesn’t apply to those landlords listed as exceptions in 44-7-36 (above) but it applies to many individual landlords and ALL property managers.  In short, if you don’t send the letter, accounting, and any applicable refund back to the tenant within a month from the day they vacated the property, then the court could hold you responsible for paying the tenant 3 times the amount of the security deposit withheld. 

Landlord-Tenant Law in Georgia: 44-7-6 Tenancy at Will & 44-7-13 Landlord's Duty to Repair

Mike Nelson - Thursday, April 17, 2014



Disclaimer – We are not attorneys and we are not trying to provide you with legal advice.  We are trying to provide you with a ready reference to Georgia law regarding the landlord tenant relationship and share some techniques our company uses to comply with those laws. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.  If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.  You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.  We encourage you to read the code for yourself and consult your own attorney before making any final decisions regarding your actions.


44-7-6  Tenancy at Will


Many people mistakenly think of any month to month lease as a “tenancy at will” but this is not the case.  

What 44-7-6 says is that “Where no time is specified for the termination of a tenancy, the law construes it to be a tenancy at will.”  

If your tenant signed a lease at move in, and that lease has language that, after the initial term the lease will be continued on a month to month basis, then you do not have a tenancy at will.  

If you have a well drafted lease form then all of the other clauses in your lease would still be applicable.  

One of those clauses may require that either party, not just the tenant, has to provide a 60 day notice before terminating the agreement.  

If you do end up with a tenancy at will, then the landlord would have to provide the tenant with a 60 day notice to vacate but the tenant would only be required to provide a 30 day notice to the landlord in order to vacate.

44-7-13  Landlord’s Duty to Repair


In Georgia, in a residential lease, it is the landlord’s obligation to keep the property in good repair.  

Changing your lease to say the tenant is responsible for repairs does not transfer this obligation.  

The judge that rules on any dispute is likely to explain to the landlord that the tenant can not sign away their rights.  

The tenant can be held responsible for maintaining the property, such as cutting the grass and keeping the interior clean and habitable.  

And the landlord can charge back any repairs to the tenant that are a result of the tenant’s abuse or neglect of the property.  

But if the house was rented with an air-conditioner, and the air-conditioner breaks during the tenancy, then the landlord must repair or replace that air-conditioner. 




Landlord-Tenant Law in Georgia: 44-7-3 Disclosure of Ownership

Mike Nelson - Thursday, March 27, 2014

Blog by: Mike Nelson

Disclaimer – We are not attorneys and we are not trying to provide you with legal advice.  We are trying to provide you with a ready reference to Georgia law regarding the landlord tenant relationship and share some techniques our company uses to comply with those laws. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.  If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.  You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.  We encourage you to read the code for yourself and consult your own attorney before making any final decisions regarding your actions.

44-7-3  Disclosure of Ownership

Under Georgia law the landlord MUST disclose the name and address of the landlord within the lease, or their “Agent for Service”.  

If the landlord is using a 3rd party property manager, then that property manager could list their brokerage as the landlord on the lease as the landlord’s “Agent for Service”.  

But then the property manager could be making themselves the defendant in any legal action between the tenant and the landlord such as in any slip and fall or failure to repair issues.  If you are a property manager, consider the amount of liability you are willing to take on before you decide to list your brokerage as the landlord in the lease.  

If you are the landlord, make sure your property manager has a broker’s license.  There are a lot of non-licensed individuals trying to manage properties for landlords which is illegal in Georgia.

There are also several sales agents that are in violation of Georgia law by managing properties for landlords without their broker’s authorization.





Excalibur Property Services - Spring Special!!

Mike Nelson - Tuesday, February 18, 2014
Spring is the time of year when things that previously went unnoticed during the cold season suddenly (& desperately!) need attention. To that end, we've developed a program to address the most frequent home maintenance issues that arise as Spring begins.

Excalibur Property Service's goal is to save you money!

Our package will address the following issues: 
  • Pressure wash exterior of house, deck, and patio.
  • Professional roof inspection
  • Detailed home inspection report listing any deficiencies.
  • Inspection and tune-up of the Air Conditioning system. Includes:
    • Filter change. Testing of: thermostats, ignition, valving, motor, burners, pilots, refrigerant charge, and CO testing.
*Total value of these services, if applied individually, equals $850.
If scheduled by April 15th, 2014, our Spring Special will include all inspections and services listed above for ONLY $495! 

To schedule your Spring Special, contact your property manager today! Or, email maintenance@excalhomes.com

2013 In Review: What is the best time of year to rent your Atlanta home?

Mike Nelson - Tuesday, January 14, 2014

Now that we know which Metro Atlanta counties produce the best rental rates, and how the number of bathrooms, the number of bedrooms, and the age of your home can affect your NOI, it's time to take a look at how the different seasons can affect not only your rental rate, but also your DOM (or, Days on Market).

Again, a landlord's ultimate goal is to increase NOI, and decrease days on market.



This data was taken from FMLS (First Multiple Listing Service, a local MLS) using the inputs listed above.

The results:
Spring: AVG Rent- $1322 AVG DOM- 47
Summer: AVG Rent- $1309 AVG DOM- 40
Fall: AVG Rent- $1327 AVG DOM- 46
Winter: AVG Rent- $1284 AVG DOM- 51

If you're looking to rent your home quickly and efficiently, then you're going to want to put it on the market during the summer season.

However, that doesn't tell the whole story. Because most tenants (especially those with children) move during "summer break", there's more competition between landlords which, in turn, causes lower rents, on average. So, your home may rent faster, but it will also rent for less.

Most experienced landlords will try to get their house on the market in the spring. This time of year offers the best of both worlds; relatively low DOM + high average rents.

Fall can also be a great time to rent your home, with high average rents and a nice average DOM number. But, be careful... winter is right around the corner.

Homes leased during the winter months had the lowest average rents and the highest DOM in 2013, by far. The weather's cold, the market's cold, and your home will likely sit empty for quite some time. 

If your current lease is going to end in the winter, then you may want to consider altering your lease terms for future tenants. For instance, if your current lease is up in December and you sign another 12 month lease... Guess what? Your NEW lease will also end in December. Instead, try to have the tenants sign a 6 month lease (or even an 18 month lease). That way, your new lease will end in June... aka the "busy season."

In summation, as a landlord, it's important to know how the time of year can affect your rental rate, your home's DOM, and consequently, your NOI. In general, when the weather's hot, so is the rental market. So, get that house on the market during spring or summer and watch your rental income continue to grow.

Atlanta Rental Statistics: Which metro Atlanta county will produce the best rental rate?

Mike Nelson - Monday, January 13, 2014

As discussed in an earlier post, Atlanta is the 6th best market in the country for investors in terms of single-family rental homes. But, Atlanta is a big city; Metro Atlanta is an even bigger area. So, the question remains: where in Metro Atlanta will you receive the highest rental rates? 

To make sense of these graphs, DOM stands for 'days on market'. This stat essentially tells us how long it took for the house to rent. As a landlord, we want a low DOM combined with a high rental rate. 

This data was pulled from FMLS (First Multiple Listing Service, a local MLS) using the inputs listed above. 

The results:

Barrow: AVG Rent- $1,015 DOM- 45
Cherokee: AVG Rent- $1,261 DOM- 46
Cobb: AVG Rent- $1,317 DOM- 45
DeKalb: AVG Rent- $1,275 DOM- 47
Douglas: AVG Rent- $1,151 DOM- 55
Forsyth: AVG Rent- $1,461 DOM- 48
Fulton: AVG Rent- $1,403 DOM- 42
Gwinnett: AVG Rent- $1,263 DOM- 46
Hall: AVG Rent- $1,251 DOM- 50
Henry: AVG Rent- $1,155 DOM- 38
Walton: AVG Rent- $1,154 DOM- 46

Average rents ranged from $1015 (Barrow) - $1461 (Forsyth)
DOM ranged from 38 (Henry) - 55 (Douglas)

Top 3 Counties in terms of highest average rent:
Forsyth, Fulton, & Cobb County

3 Counties with the lowest average rent:
Barrow, Douglas, & Walton (Henry is a close 4th)

As an investor, there are many other factors (other than rent) that will influence your decision to purchase. But, when looking at which areas will, on average, net you the most rental income, Forsyth, Fulton, & Cobb become the clear choice.

Atlanta Rental Statistics: How will the number of bathrooms in your home affect the rental rate?

Mike Nelson - Sunday, January 12, 2014

When investing in rental property, it's important to consider every factor that can have an impact on the success of your rental. 

Some people say it's all about "Location, Location, Location!" and stop there. Others, more wisely, will consider location among other factors including: Year Built, Schools, Amount of Bedrooms, Tax Rates, HOA Fees & Restrictions, Closing Costs, Insurance, Property Management, and Leasing Fees.

So, how big of an impact does the number of bathrooms have on a home's rental rate? And, in turn, on you ROI?

We've gathered data via FMLS (First Multiple Listing Service, a local MLS) using the following criteria:
  1. 3 Bedroom Homes
  2. Leased for $800-$2000
  3. Leased in 2013
  4. In Barrow, Cherokee, Cobb, DeKalb, Fulton, Gwinnett, Hall, Henry, & Walton Counties; essentially all of Metro Atlanta.
In reviewing the data, DOM (days on market) seems to be unaffected. However, it's abundantly clear that the number of bathrooms in a home has a direct impact on the rental rate. 

MORE BATHROOMS = MORE RENT

Consider this: 

Two investors purchase almost identical homes in the same neighborhood.

Investor A's home is a 3 Bedroom, 2 Bath house.
Investor B's home is a 3 Bedroom, 3 Bath house.

All else being equal, "Investor B" can expect to collect approximately $1230, compared to $1193 for "Investor A". 

That's a 3.1% increase. It may not sound like much on the surface, but in this example "Investor B" is walking away with $37 more per month, and $444 more over the course of a year. 

So, when shopping for your next home, consider more than 'just' the: Location, Year Built, Schools, Amount of Bedrooms, Tax Rates, HOA Fees & Restrictions, Closing Costs, Insurance, Property Management, and Leasing Fees.

Consider the amount of bathrooms.

Atlanta Property Management: What effect does the age of my rental house have on ROI?

Mike Nelson - Wednesday, January 8, 2014


When investing in rental properties, it's important to understand what effect the age of a house (or, 'year built') will have on your return on investment, or ROI.


While pulling this data from FMLS (First Multiple Listing Service, a local MLS), we targeted homes comparable to Excalibur's own inventory. 


We looked at homes that rented between $800-$2000 throughout the entire year of 2013, in the following counties: Barrow, Cherokee, Cobb, DeKalb, Douglas, Forsyth, Fulton, Gwinnett, Hall, Henry, & Walton. 


Looking at the graph, it's clear that homes built before 1990 take much longer, on average, to rent. (48 days on market, compared to 44 for homes built after 1990)


It's also clear that the age of a home has a direct relationship with the market rent. All else being equal, newer houses = MORE rent. 


But, that's not the entire story. What's not represented in this graph is the cost of maintenance. Older homes tend to have more maintenance issues than newer homes, which means that owners of older homes are often operating 'in the red.' Buying a newer home is a good way to take that P&L statement from 'red' to 'black'. 


So, when you're shopping for a new investment home, consider more than just the price of the house. Consider the age; it can make a world of difference.


Click here to find out why landlords choose Excalibur Home Management for all of their property management needs in and around Atlanta.

Atlanta Rental Statistics: Should You Invest in a 3 Bedroom or a 4 Bedroom Home?

Mike Nelson - Monday, January 6, 2014



This information was pulled from FMLS (First Multiple Listing Service, a local MLS) using data from throughout 2013 in the following counties that Excalibur Home Management is proud to serve: Barrow, Cherokee, Cobb, DeKalb, Douglas, Forsyth, Fulton, Gwinnett, Hall, Henry, and Walton County.

3 Bedroom Rent Statistics:
Min: $700 
Max: $2000
Standard Deviation: $268
Average Rent: $1222
Average DOM: 47

4 Bedroom Rent Statistics:
Min: $800 
Max: $2000
Standard Deviation: $254
Average Rent: $1412
Average DOM: 47

As you can see, the average days on market was not affected by whether the home is a 3 or a 4 bedroom.

But, unsurprisingly, the rental rate is quite a different story.

According to the empirical rule:
68% of 3 bedroom homes (in these counties) should rent between $954 and $1490.
68% of 4 bedroom homes should rent between $1158 and $1666.

95% of 3 bedroom homes should rent between $686 and $1758.
95% of 4 bedroom homes should rent between $904 and $1920.

4 bedroom homes not only have a much higher average rent versus 3 bedroom homes, but they also have a lower variance in rental rates; meaning, in general, you should feel confident knowing that (all else being equal) homes with 4 bedrooms will produce more rental income, which will increase your NOI while subsequently increasing your return on investment.



Showing 41- 50 of 105

Excalibur Homes
2855 Marconi Dr, Suite 310
Alpharetta GA 30005
678-825-0500 Fax:(678) 825-1401