If you have been reading my newsletter for a little while you might have noticed that more and more investment activity has been pushing north of the Atlanta metro as we manage a lot of properties in that area we noticed the news recently at Lakeshore Mall in Gainesville Branch Properties just got approval to transform this 49-acre site into a dynamic mixed-use development with 652 apartments. While that's exciting news, it got me thinking about a conversation we had recently with a property owner we'll call Sue. *that’s not her real name
When Property Management Gets Personal
Sue inherited her parents' rental home in Marietta. Like many new landlords, she thought managing a rental property would be straightforward. But she has a full-time job, and just as we mentioned in last month's newsletter rising insurance costs were squeezing profits. Plus, to top things off a few middle-of-the-night flooded water maintenance calls, she was feeling overwhelmed.
Her story might sound familiar if you're juggling property management with... well, life. I’ll share how we helped Sue in just a minute.
The Ray Dalio Effect
This brings me to something interesting I heard on the All-In Podcast. Ray Dalio (one of our favorite investors to learn from) shared a fascinating insight: if the government cuts its deficit to around 3% of GDP, we could see interest rates drop significantly.
What does this mean for property owners like you or Sue? Well, it's complicated - but in a good way:
- Lower rates could mean easier refinancing
- Property values might see a boost
- More buyers could enter the market
But (there's always a but), government cuts could also mean slower processing times for permits, licenses, and other real estate-related paperwork. It's like a teeter-totter - what helps in one area might pinch in another. However, if bond ratings improve, Treasury rates could drop, potentially leading to lower mortgage rates. This is one of the first time I have read that in recent years and since interest rates are so critical to real estate it is something we think people should be paying attention to.
The DOJ's Latest Move Makes Professional Management More Critical Than Ever
Now back to some property management struggles, you may have seen the news about the Department of Justice (DOJ) suing several major landlords for price fixing? The DOJ is alleging that some big players used pricing algorithms to artificially inflate rents.
This lawsuit underscores something we've always believed: property management isn't just about collecting rent - it's about doing things the right way. For property owners like Sue, this means having a professional team that understands both the market and the regulations. While I don’t think the DOJ is going to be coming after any small-time landlords there are some pretty critical laws and legal requirements that landlords need to follow.
Why All This Matters for Atlanta Property Owners
What we found with Sue's situation wasn't unique. After reviewing her property, we discovered several opportunities that she, like many self-managing landlords, had missed while juggling her full-time job with property management:
- Her rental rates were 15% below market
- Preventive maintenance had been overlooked
- Insurance coverage needed updating
- Several tenant requests had been handled reactively rather than proactively
And let's be honest - doing all this while holding down a full-time job or managing from out of state? That's like trying to juggle while riding a unicycle. At least in our opinion, since we do this all day long and can't imagine how difficult it is to do it on the side. |
