Category: Chattanooga Property Management

Why is it important to have local property management?


Matthew Whitaker - Tuesday, September 18, 2018

Hey, everybody. Matthew Whitaker here.

I’m doing “Questions Owners Ask”. Today’s question is, “Why is it important to have local property management?” So, why is it important for the manager to be local?

First thing is local knowledge of the market. How do you know what things rent for? How do you know what houses in the area do? What’s a good street? What’s a bad street? Having a local manager that is familiar with the area is so super important.

Number two, local maintenance vendors. The kind of big boy property management companies typically don’t have local maintenance vendors. We actually employ our own maintenance vendors, so they’re obviously local. And, you know, having eyes and ears in that house for you that work for us is very important.

The third thing is a local trusted brand. So, renters rent from people that they trust. And if you have a local trusted brand, then your house is probably gonna rent faster. In other words, they already have a cycle of tenants that are coming through that you’ll be able to tap into that.

So, today’s question was, “Why is it important to rent from a local property management company?” I’m Matthew Whitaker with gkhouses.

The Chattanooga Property Management Contract – What You Need To Know


Spencer Sutton - Thursday, May 24, 2018

A Chattanooga property management contract will cover many issues from fees to liability to pets and termination.

Chattanooga Property Management ContractMost of the owners who get in touch with us are interested to see our Chattanooga property management contract. We share it with them and give them an opportunity to read through it from start to finish.

In this article, we wanted to share the main aspects of a Chattanooga property management contract to help you make sense of some of the legal jargon. We will not cover every nuance that may be in a management agreement you see. We will only cover the main aspects.

You will also learn what you should expect, no matter what property manager in Chattanooga you use!

Don’t expect a thorough and detailed list of contract items, but the main highlights.

The Basics Of A Chattanooga Property Management Contract

The most basic elements of the management agreement include the date, name of the client or entity, and the property address of the home to be managed.

After these formalities, the agreement picks up steam.

1. Leasing Authority

This section of the property management contract is mostly centered around the property managers authority when leasing your home.

  • Term – This will be the beginning date of the contract and will usually last for one year. Some companies will let you cancel with a 30-day notice, and some may attempt to hold you to that term. Make sure you are comfortable with the term before signing.
  • Owner Representations and Disclosures – This portion of the contract states that the owner will disclose any known defects to the property manager. This ensures that the property manager is presenting all of the correct information to the tenant when leasing the home. The disclosure would include any lead-based paint, delinquent payments, or unpaid taxes.
  • Marketing – In this section, you are giving the property management company the right to market your home for lease to find a tenant. The agreement will also give your property management company permission to hang a lockbox on the house.
  • Security Deposit – This states that your property manager will charge a security deposit to the tenant and hold it in a separate account. Once the tenant moves out, your manager will be responsible for returning that deposit to the tenant minus any tenant-related damage caused to the home.
  • Agent Duties – In this section of the contract, the owner gives the agent the ability to perform the following leasing activities:
    • Advertise the property
    • Show the property
    • Process applications
    • Provide a lease to the tenant

2. Management Authority

This section of your Chattanooga property management contract moves from the leasing and marketing aspect to the day-to-day management of the property.

Here is each duty from our Chattanooga property management contract:

a. Collection of rent – We will take all reasonable steps to collect rent from the tenant
b. Expenses and mortgage – We will pay all costs incurred while managing your property and the owner be responsible for paying anything like the mortgage, taxes, HOA dues, and insurance premiums
c. Inspection and repairs – The owner is responsible for paying for repairs, and we will be responsible for supervising and managing any repairs
d. Negotiation of leases – We retain exclusive right to negotiate leases on the owner’s behalf
e. Independent contractors – We can hire or fire contractors while managing the property
f. Tenants – We will handle all tenant requests
g. Records – We will keep an accurate record of any money received or paid out on the owner’s behalf
h. Payment of owner – We will pay the owner after all expenses settle for managing the property

There are other terms that we explain underneath the ‘management authority‘ of our contract.

  • Insurance – We require every owner to carry liability and hazard insurance
  • Financial Responsibility of Owner – This portion of the contract covers the responsibility of the owner to pay for any expenses that are incurred by the property manager. Usually, the management agreement will have wording about non-payment and any penalties for non-payment.
  • Habitability – The owner agrees that the property is safe and can be lived in by a tenant. Also, the home must comply with all state and local ordinances.
  • Agent Compensation – This section of your Chattanooga property management contract will explain any fees that they are going to charge. These fees can be management fees, tenant fees, maintenance fees, contractor fees, and any miscellaneous fees that might come up while managing your property.

3. Indemnity

This is the part of the Chattanooga Property Manager contract where you promise to hold the property manager harmless for anything that happens while they are managing the property.

This indemnity can include lack of performance or bodily harm. It is standard for most any management agreement.

In return, the property manager also agrees to hold you, the owner, harmless.

4. Termination

This section of the agreement will describe the termination policy of the management company. In the case of our management company, gkhouses, we have a 30 day written notice termination policy.

The reason we ask for 30 days is so that we can settle accounts and make sure we prepare any documents you may need to either self-manage or send it to another property manager.

Some Chattanooga property managers may have a cancellation penalty if it terminates before the 12-month contract date. We have a 100% Happiness Guarantee that gives the owner the opportunity to cancel at any time for any reason without penalty.

Conclusion

It is important for you not only to understand the property management contract before you sign, but you need to feel comfortable. Every contract is going to include some give and take. What is important is that you believe what is being asked of you by the Chattanooga property manager is fair and reasonable.

As your agent, a good property manager wants to represent you and provide you with valuable service.

We hope that this article has been helpful in explaining parts of a Chattanooga Property Management Contract.

If you would like to see our actual management agreement or speak to someone about managing your property, please give us a call at (423) 648-7368.

Chattanooga Property Manager Fees And Pricing


Spencer Sutton - Thursday, May 10, 2018

Are you interested in learning more about Chattanooga Property Management Fees and Pricing?

Renting property can be a good source of income for many people, but there may be some risks and problems if you don’t have any experience managing your property. One of the most important questions we are asked all the time is “What are Chattanooga property management fees and pricing?”

Chattanooga property management fees and pricingNew investors often try to diversify their assets into real estate as a source of regular income here in Chattanooga, Tennessee. Many times, they can find the property to buy but have trouble understanding the complexities of managing rental property.

If you are considering using a Chattanooga property manager, this article will help you understand the most common fees and pricing strategies.

In this post, we will walk you through the different pricing structures you will encounter in your research.

Leasing Fee

Many Chattanooga property management companies will charge what’s called a leasing fee once they have placed a new tenant in your home.

Usually, these fees will cover a variety of items:

  • Expenses of advertising the property on their marketing channels
  • Analyzing and screening of the potential tenants
  • Scheduling tours of the property to prospective renters
  • Preparing leasing paperwork

These fees may also cover a commission for real estate agents for placing the tenants on the property.

The fees vary depending on the property management company you choose but can range from one month’s rent to a flat charge. Some companies may give you options based on different pricing packages. That’s what we do here at gkhouses.

Our least expensive package, which we call our Silver Plan, has a leasing fee of one month’s rent and our most expensive package, the Platinum Plan, doesn’t have a leasing fee. The actual fee may vary based on what your property manager of choice is offering.

When you think about it, these fees are insignificant compared to the potential risk of losing income from the property by having no tenants for months while you try to advertise and screen tenants yourself.

The price of one month’s rent can cover hours of planning and work, and alleviate your stress about making the wrong tenant decision or by accidentally breaking some obscure landlord-tenant law. Paying the leasing fee and leaving all of those issues in the hands of professional Chattanooga property managers can be a wise decision!

Management Fee

The management fee is the primary fee that covers regular daily management of the property.

This fee can cover many services for your tenant and property:

  • Processing and collecting rent
  • Communication with tenants
  • Coordinating repairs for your property
  • Annual property inspections cost

This management fee can vary from the type of services that are provided by your property management company. It is important to choose the payment condition that will work best for you.

In the past, it has been charged within 8-12% of your monthly collected rent or in some other cases; it can be in the form of a monthly flat fee. Rates of those charges vary by location and Chattanooga Property Manager.

Some Chattanooga property management companies might charge only during tenant occupancy. In this case they will stop the management fee when the tenant vacates the property.

Other property managers will charge a fee throughout the vacancy and provide you with additional services during that ‘turn’ time.

It all depends on the property management agency you choose. Some might offer you special pricing for the specific list of services that they provide.

Renewal Fee

As we mentioned before, a majority of property managers charge a leasing fee. This is for new tenant placement to cover the expenses of paperwork for leasing or re-leasing the property when it becomes vacant.

The renewal fee is a lesser fee charged when the management company is successful in getting the tenant to sign another year lease.

Our renewal process begins 120 days before the lease anniversary. We reach out to our owner and ask if they would like to renew the lease with their tenant. If they do, we begin reaching out to the tenant 90, 60, and 30 days before the anniversary to have them renew the lease.

Other companies may have different strategies, but this strategy works for us. It’s also during this time when we advise the owner on if they should raise the rental rate or keep it the same.

Maintenance Fees

When planning to create a profitable investment in rental property, you must consider the expenses of repair and maintenance. People who are new to investing in rental property might lose more money than they expect if they have a DIY approach. Or worse yet, lose a tenant over poor maintenance habits.

Many Chattanooga property management companies offer services considered to be preventive measures. Some of the preventative services we offer our owner are bi-annual HVAC inspection, filter and battery checks, and gutter cleaning.

It’s important to consider these optional services when thinking through the long-term nature of rental property.

When you have a trustworthy property manager for maintenance of your rental property you should expect quality from their maintenance. This includes a realistic estimate, stellar craftsmanship, and a guarantee to fix anything that might go wrong after the repair is completed.

For instance, we have a guarantee of quality for up to 12 months, and all of our work is performed by a licensed and insured professional. You may pay more than ‘Chuck In A Truck,’ but you will avoid the possibility of faulty work and unnecessary liability.

Depending on the agency you choose to work with, you can expect them to provide maintenance services by either a third party supplier or their in-house crew.

At gkhouses, we do both. For the more common repairs like plumbing, electrical, heating and air, and general carpentry, we will use our in-house staff.

For other jobs outside of our expertise or less prevalent, we will use a trusted vendor.

Miscellaneous Fees

Evictions – Unfortunately, evictions are a part of owning rental property. In the unfortunate case that you end up needing to evict your tenant, you will need to pay several fees:

  • Court costs
  • Attorney fees
  • Set-out fees

In Chattanooga, you can expect to pay approximately $300 and then any additional set-out charges.

Additional accounting charges – In some cases, an owner may request special accounting services from their property manager. In those instances, you can expect a fee for handling these items. These may include paying bills, mortgages, HOA dues, or similar services.

Most typical services bring no additional fees.

Conclusion

Property management prices in both downtown Chattanooga and all up the Tennessee River are quite reasonable. However, it’s important for you to educate yourself so that you can predict cash flow.

Every property management company in the Chattanooga area has different approaches. You will need to focus on the type of service that most fit your specific needs.

If you would like to learn more about our Chattanooga property management fees and pricing, you can visit us here. And please reach out if you have any questions whatsoever.