Category: Choosing A Property Manager

Nashville Property Management vs Self Management


Spencer Sutton - Wednesday, May 30, 2018

You may be trying to decide between self-management or using a Nashville Property Management company for your rental house.

Nashville property management vs self managementI’m glad you found this article because that’s what we’re going to break down.

Weighing the advantages and disadvantages closely, one can easily see that it is not all about how much it costs.

When you consider the headaches of dealing with middle of the night maintenance calls, late payments, tenant complaints, and understanding your local landlord-tenant law, it can seem a bit overwhelming.

To these people, it may make sense to look for a Nashville property management company that can take tenant calls, schedule maintenance, and collect rent. All while keeping landlord-tenant law compliant.

To others, however, they enjoy the hands-on nature of managing rental property. And having the opportunity to trade their time for a more in-depth understanding of managing rental property makes sense.

The Case For Self-Management

You are intimately aware of all aspects of the rental process.

Some owners enjoy and want to know everything that is going on with their house and the tenant.

Hiring a Nashville Property Management firm might give you advantages in many ways, but it won’t give you 100% clarity on the day to day operation of your rental.

For that hands-on ‘in the business’ clarity, it is best to manage the property yourself.

You will be involved in marketing and advertising, showing the home, processing applications, signing leases, collecting rent, and managing maintenance. This process will give you insight into your rental business that you won’t have if you hire a Nashville property management company.

You will keep more of the monthly rent for yourself.

One of the first questions a prospective owner asks us is, “How much are your fees?” It’s a good question and an appropriate question. But the point here is that no matter which Nashville property management company you hire, you will be paying something!

It could be a flat fee per month or possibly a percentage of monthly rent. But the point remains, you will forfeit some of the rent each month to pay your property manager.

Some property owners may need the extra money to help cover a mortgage each month. Also, some owners may want to manage their property so that they can reinvest what they would have paid in fees back into their rental business.

Whatever the case, if you manage your property, you will save those monthly management fees and can use them how you feel best for your situation.

You have the opportunity to hand-pick your tenants.

If you manage your rental property yourself, you are responsible for finding a qualified tenant. Now, if you’re a homeowner without rental experience, this can be a daunting task.

What if you put a tenant in your home that has a prior eviction on his or her record? What if your tenant falls on hard times? How will you address this with the tenant? This issue can be especially nerve-racking if your tenant is a friend or relative.

However, if you have a well-defined process for screening prospective tenants and do not fall prey to using your gut feelings, this can be a positive experience.

Also, you will need to understand and follow the Fair Housing Act. Adhering to this act will make sure you do not discriminate during your application process.

You can evaluate and hire maintenance people to do work on your home.

Hiring a maintenance person will give you control over the work and presumably the cost of each repair. If your HVAC goes out in the summer, you will choose the HVAC contractor that appeals to you.

This kind of hand-picking your maintenance person can happen even if you hire a property manager, but it will depend on the property manager’s agreement with you.

Some managers say you must use their preferred vendors or staff while others are ok letting you bring your contractor to the relationship as long as they do quality work.

If you have a lot of experience with property maintenance, then this would be an advantage because a property manager is most likely going to charge a fee to manage the maintenance project.

The Case For Hiring A Nashville Property Management Company

You will not be mired down in the day to day of managing rental property.

For the busy person who is not an expert at managing rental property, this will be good news! The Nashville property management company you hire will handle all of the details and keep you informed of the most critical aspects of your rental house.

  • Marketing information
  • Applications
  • Leases signed
  • Rent collected
  • Maintenance issues handled
  • Monthly accounting

This service can save a rental house owner many hours and a lot of stress and headaches. There’s a reason why the majority of property managers manage less than 300 houses. It’s because managing rental homes is a tough business and you need to be able to handle the stress and conflict in a professional manner.

You trade a management fee for your time and save the emotional stress of rental property.

Hiring a professional Nashville property management firm is going to cost you a monthly management fee, that is true. But to the owner who is looking for value, this will be a no-brainer.

Some owners don’t have the expertise to market a home. Much less screen tenants, review leases, collect rent and manage maintenance. To these owners, the monthly management fee is money well spent.

When you hire a Nashville property management company, they act as your agent and handle any issue with your tenant or home.

And if you own rental property long enough, you will have times of conflict with your tenant. This situation alone may be worth the monthly management fee you will pay a Nashville property management company.

You significantly reduce your risk and liability by allowing a professional to screen your tenant.

A Nashville property management firm will more than likely screen tenants in at least three of these five ways (we do all five):

  1. Credit – A good manager will have what they consider to be a baseline credit score and possibly some exceptions if a tenant agrees to a more substantial security deposit
  2. Employment verification – This allows the property manager to ensure that they haven’t recently (within the past weeks) lost a job that the income verification would miss.
  3. Income verification – Having a minimum ration of income to rent is advisable, and your Nashville property management company will have years of experience on what ratio works well.
  4. Criminal background check – We believe in second chances, but our owners would rather that second chance not come at their rental house’s expense.
  5. Previous property management referral – Asking questions like, ‘Would you rent to this tenant again?’ is an objective question that every former landlord or property manager finds easy to answer – yes or no!

A professional will know how to screen in a way that follows the law and dramatically reduces the risk that you will have a delinquent tenant in your house.

A professional property manager will mitigate your risk when it comes to maintenance on your rental house.

For the ordinary landlord, having a company with trusted staff or vendors who can work on your house is great. A trusted maintenance crew can end up saving you thousands each year. We have many owners who come to us only after a horrible situation. It usually happens during a rehab or if there is a complex maintenance issue.

If you are not careful, you can end up paying for shoddy work that only serves to make your tenant more unhappy and eventually leave.

The goal of owning rental property is to keep tenants long-term so that you don’t have to deal with expensive and complicated rehabs. If you bumble and fumble maintenance, that is a recipe for losing a good tenant.

A good Nashville property management firm will have trusted vendors or staff in-house. This expertise will give your tenants the assurance that you are looking after their best interests.

For instance, at gkhouses, we have a maintenance guarantee for 12 months. If something breaks within 12 months of us fixing it, we will make it right at no additional cost.

That kind of guarantee can give you peace of mind that you’re receiving quality work that will last.

Conclusion

No matter which decision you make for your situation, you can succeed owning rental property in Nashville.

If we can ever do anything for you, give us a call at (615) 925-3880. You can also fill out a form on our site.

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.

What Does A Little Rock Property Manager Do?


Spencer Sutton - Wednesday, May 23, 2018

What does a Little Rock property manager do?

Good question…it depends!what-does-a-little-rock-property-manager-do

The ‘it depends’ answer may not satisfy your curiosity, so we will walk you through some of the most common services you can find in Little Rock Property Managers.

What might matter to you is that your property is in shape, your tenants treat your house with respect and that you don’t have to deal with any issues that arise.

On the other hand, you might be more interested in the value you receive from the property management fee you pay each month. You may enjoy handling any maintenance issues yourself and want someone to collect rent and pass it on to you.

Whatever the case, we are sure there is a Little Rock property manager to fit your needs. In this article, we will explain the most common services property managers provide for their owners.

Property Inspections

A good Little Rock property manager will have several different kinds of inspections they perform or offer.

When you hire a property manager, there are several things they will do first. They will come out and walk through your property, discuss rental rates, and give you a list of items you should address before the property hits the market for rent.

We call this initial inspection a rent-ready walkthrough. It helps an owner understand what kind of condition their home should be in to find a great tenant.

Another inspection you should expect is a bi-annual or quarterly inspection. This inspection will give you the opportunity to see how the tenant is taking care of the home and address any issues the property manager highlights in their report.

Our quarterly inspections are an owner favorite and can help to ease any fears they may have when they think of a tenant living in their house.

Marketing and Tenant Screening

When the home is ready to rent, your Little Rock property manager will take all of the necessary marketing photos. They will then put them on their website along with other favorite sites.

These sites may include:

The goal of this marketing is to drive traffic to your home. The more people see inside the home, the better your chances of finding a great Little Rock tenant. You may receive three applications, and one is approved to rent your house.

Once an application is received, your Little Rock property manager should carefully screen the applicant. At the very minimum, you should expect them to look at the applicant’s credit score and ability to pay rent.

Little-Rock-Property-Manager-ChecklistAt gkhouses, we underwrite in five different ways:

  1. Credit check
  2. Employment verification
  3. Income verification
  4. Previous landlord reference
  5. Criminal background check

When your house markets well and applicants screened carefully, your chances of finding a well-qualified tenant to rent your home are high.

Leasing

Your Little Rock property manager will act as an agent for you. As your agent, they will provide your new tenant with a lease to sign.

Most leases are 12-months in duration and can renew at the anniversary date if you and the tenant agree it is in your best interests.

You will want to ensure that your property manager has a fair but firm lease for your tenant.

It should be fair because there is going to be specific tenant-landlord law in the lease.

And it should be firm to hold a tenant accountable during their time in your home.

Collections

Collecting rent is an essential part of the entire renting process! One of your goals should be to make a return on your real estate investment.

Collecting rent is pretty straightforward. In most cases, rent is due on the first of the month and late after a specific date after the first. The late fee in the lease your Little Rock property manager signed with the tenant might be a flat fee or a percentage of rent.

We have always felt that treating rent like a mortgage payment is beneficial to our owners and the tenants. We consistently send a monthly statement to our tenants around the 20th of the month to let them know that rent is due on the first.

If they have a balance on their account for whatever reason, we include the charges on the statement. This statement helps remind the tenant as well as communicate in clear terms.

If a tenant falls behind on their monthly rent payment for whatever reason, we address it immediately with them to find out when they are going to pay rent.

When a situation becomes severe, your Little Rock property manager will move towards evicting your tenant.

Your property manager will handle the details of the eviction, but you will be responsible for paying the court costs, attorney fees, and set out charges.

Maintenance

Managing maintenance for your tenant is a large part of the service your Little Rock property manager provides.

Some owners ask if the maintenance costs are included in the management fee. The answer to that question is always ‘no.’

Different property managers handle maintenance differently. Some managers outsource all of the maintenance to third-party contractors while other managers have in-house maintenance.

When a manager uses a third-party, there is usually a small fee for managing the vendor and repairs. When a manager has an in-house crew that repairs your home, they will typically charge an hourly market rate for their service.

Both of these options have their advantages but you may have a preference. Ultimately, what you as an owner want to concern yourself with is that your tenant is taken care of and that the cost of the work is reasonable.

When you consider how much you should budget for maintenance, it is vital to consider the age of the home and how much time your tenant will spend living in the house.

If your home is ten years old and your tenants are professionals who work every day, you can factor in less maintenance to your annual budget.

However, if your home is 70 years old and your tenant receives a government subsidy, expect a higher maintenance expense. The higher cost is explained by both the age of the home and the amount of time the tenant will live in the home.

Accounting

Your Little Rock property manager will handle daily, weekly, and monthly accounting you need to ensure all income and expenses recorded.

You should expect to receive a monthly statement with income and expenses listed. At the same time, expect a check or your funds deposited directly into your bank account.

At gkhouses, we send a mid-month statement with payment and then follow up with an end-of-the-month statement with additional payments should there be any.

We have heard of property managers who don’t send monthly statements. This is a red flag, and you need to avoid any property manager who is not transparent in their financial dealings.

Keep up with landlord-tenant law

Your Little Rock property manager will have plenty of experience with adequately screening tenants, signing leases, and managing work orders.

You will also want them to be up-to-speed on the latest landlord-tenant law to make sure you are not a part of a future lawsuit.

The Arkansas landlord and tenant law will address several issues:

  • Raising rent
  • Notice of termination
  • Repair and maintenance
  • Security deposits
  • Evictions
  • Discrimination

Ask enough questions so that you’re sure your Little Rock property manager understands the law!

Conclusion

Little Rock is a great place to own rental property. We have seen an increase in investor interest this year from both in-state and out of state investors.

If you read this article and feel that hiring a Little Rock property manager is the choice for you, give us a call. We would be delighted to visit your home and give you our professional opinion.

You can reach us at (501) 232-0676.

Your Guide To Hiring A Property Manager In Nashville


Spencer Sutton - Tuesday, May 22, 2018

Are you considering hiring a property manager in Nashville?

Hiring a property manager in NashvilleIn this guide to hiring a property manager in Nashville, we’ll discuss issues that you need to consider before you make a decision. Some of these issues will be obvious while other matters we address will be more obscure but no less significant.

Whether your an investor or an individual homeowner, we hope this article will help you make the best decision about hiring a property manager in Nashville.

In almost all cases, having a professional property management company take care of your real estate is wise. A competent Nashville property manager will make your experience both simpler and safer than managing the property yourself.

For starters, there is a long list of administrative, legal, and financial issues that you will need to take care of when you decide to rent your home.

And unless you plan on making property management your full-time job, and you have some experience in landlord-tenant law, this can be an unnecessary risk.

Plenty of people manage their personal rentals, and this article will also help you decide if you should or if you would be better off letting a Nashville property manager handle it for you.

And if you choose to manage the property yourself, at least you have thought through the relevant details!

Property Management in Nashville, TN

The tremendous growth in Nashville over the past 20 years has made it a target for commercial developers and residential real estate investors alike. The opportunity to buy and hold houses that experience double-digit appreciation has drawn national attention to the city.

Rental prices are also increasing steadily. At the same time, taxes remain somewhat reasonable.

A case for using a proper manager in Nashville:

So why would you want to hire a property manager in Nashville to handle your rental house?

The primary advantage of any property manager in Nashville is their vast knowledge and experience. They understand the local rental market and have developed reliable systems and processes over the years.

These systems and processes address everything from marketing your home to efficiently collecting rent each month.

A good manager will have systems and processes for almost every aspect of their business. Including answering your questions and making sure you feel comfortable with their ability to manage your home.

The goal of offering proven systems for some of the most critical tasks is to ensure that you can maximize the potential of your property.

You will also benefit from the city knowledge of the local manager as you have a shared interest from the get-go. A great property manager will try to accomplish these goals for you:

  • Find the best market rate for your home
  • Market your home quickly and on as many websites as possible
  • Process applications carefully to screen out any potential problem tenants
  • Sign a Tennessee landlord-friendly lease

These benefits coupled with saving your time may be enough to convince you that using a property manager in Nashville is your best bet.

Property Management Fees:

When picking out a property manager in Nashville, one of the first things you will be considering is the cost. You will want to find a manager that offers a pricing package that you are comfortable with paying.

This could be a flat percentage (like our gkhouses pricing plans) or a percentage based fee for services.

Flat fee pricing has become more popular in recent years. Our own decision to move to flat fee pricing came after eight years of a percentage based fee.

We felt the move turned out beneficial to our clients. If someone in Nashville who rents their house for $1,500 per month can receive full-service property management for $85 per month, that is a good deal.

The percentage-based pricing has been around for many years and is still the most common method of pricing.

What about other costs?

Maintenance Costs

It’s our experience that most owners underestimate the amount of maintenance that their property needs.Nashville property manager maintenance

The Nashville rental market may play a role in owners not seeing the value in regular preventative maintenance costs. When a tenant vacates a house, it is easy to rent it quickly.

With this, the owner may believe that it is in 100% rentable condition when, in fact, the tenant doesn’t want to risk losing an affordable house in their desired location…so they rent it without voicing concern over maintenance issues.

Not only will you have maintenance issues when a tenant moves out, but you will also face maintenance issues during a tenancy. This is to be expected and should factor into your budget.

One of our services is a quarterly inspection of rental houses. Our Property Manager Technicians walk properties once a quarter and send reports back to our owners. This report highlights any maintenance issues we believe the owner should be aware of in case they would like to fix something before the tenant complains.

The property manager in Nashville you choose may have a maintenance department, or they may outsource all of the work and manage the vendors for a small fee.

It’s essential that you find a company that you feel comfortable can handle your maintenance in a manner that will preserve the value of your rental house investment.

Leasing and renewal fees

Most property managers in Nashville will charge what’s known as a ‘leasing fee,’ or a ‘lease up fee.’

This fee typically covers the following services:

  • Taking marketing photos
  • Posting on their website as well as syndicating to other favorite sites
  • Showing your property to potential tenants
  • Processing applications
  • Choosing your tenant and having them sign a lease

Leasing fees typically range from half of the first month’s rent to a full month’s rent. And the fee is only charged when your property manager places a new tenant.

The renewal fee is charged when a current tenant agrees to renew the current lease for another 12 to 24 month period. Renewals are essential because they help give you the security that you will have a tenant for at least another 12 months.

In our renewal process, we reach out to you, the owner, 120 days before the lease anniversary date and ask if you still want to rent the home for another 12 months. This is your opportunity to say ‘no!’

Once we hear from you, we reach out to the tenant 90 days out and confirm they want to renew the lease. If we don’t hear from them right away, we reach out 60 and 30 days out as well.

The renewal fee is typically much less than the leasing fee and is usually a flat fee. Our renewal fee is between $0 and $200 depending on which package of services you choose.

Eviction Services

If you ever face the unenviable task of dealing with a tenant who stops paying, you may need to file for eviction.

The eviction is something your property manager in Nashville will handle, but you will incur the expense.

You may be thinking, ‘If my property manager does a great job at screening my tenant, I shouldn’t have any evictions.’ In theory, that is correct.

However, a tenant can fall behind for many reasons that will never surface during the application process.

Here are a few reasons:

  • Loss of job
  • Divorce
  • Personal crisis

There are many reasons that a person, a good tenant, could fall behind.

In that situation, your property manager should handle the process of posting a notice and following the law until they are out of the home. However, you will be responsible for court costs, attorney fees, and any set-out charges that may be a result of the eviction.

Additional Considerations

Besides pricing, what should you look for in a Nashville, property manager? Here are some helpful questions you need to ask before hiring your property manager:

  1. Do you offer any guarantees with your services? A manager could guarantee tenant performance, maintenance, or some other aspect of their management services
  2. What is your eviction rate? The fewer the evictions, the better their screening process
  3. What is your occupancy percentage? If they have a high percentage of vacant houses, their leasing may be lackluster
  4. What is your tenant screening process? Ensure you believe they are correctly underwriting your tenants
  5. Do you have a collections process? If so, please explain.

Those are just some questions you should ask. To see all 27 that we identified, check out this article.

There may be several other questions you have in regards to Nashville Property Management. Reach out to us at (615) 925-3880 ext 3 if we can ever be of service.

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.

Questions You Should Ask Before Hiring A Property Manager


Spencer Sutton - Thursday, November 5, 2015

Questions You Should Ask Before Hiring A Property Manager

Hiring a property manager can be a stressful situation for a homeowner.

That is why we came up with 27 questions you should ask before hiring a property manager!

We are called and emailed each week by owners interested in finding the best property manager in one of the markets we serve. They are also interested in knowing more about what services gkhouses offers to owners.A woman thinking about all of the questions you should ask before hiring a property manager

There are several ways to determine a good fit for both owner and property manager. To do this well, we believe there at least 27 questions you should ask before hiring a property manager.

However, most homeowners only ask a handful of questions. The typical questions we hear are things like:

What are your owner fees?

How long will it take you to rent my house?

How do you handle maintenance?

We believe these are good and valid questions.

However, in this post, we want to give you a comprehensive look at property management services and the 27 questions you should ask to determine if they’re a good fit for you.

So here we go….ready?

27 Questions You Should Ask Before Hiring A Property Manager

When you set out to call/email and begin to ask questions to a property manager, it probably means that you’re well on your way and may have even decided to rent your house.

Most of the owners we speak with are ready for someone to come to their house, help them determine a rental rate, and sign paperwork. But for those of you who aren’t quite ready to pull the trigger, here are some things you should strongly consider before you decide which company you will use to manage your house.

Let’s look at the questions surrounding these different subjects – Strategies, Results, Systems for a Property Manager, and Experience and Maintenance Team Experience.

1. Strategy Questions You Should Ask Before Hiring A Property Manager

ResponsivenessWho typically responds to questions and how quickly do you answer? The speed the manager responds to your initial questions is a good indication of how responsive the manager will be once you are a client.

Another good indicator of their responsiveness is if you reached out for more information on their services and it took them a day or two to get back with you…that’s not the best sign!

ProfessionalismWhat do your managers typically wear on a normal day? Our industry is what we consider to be a ‘mom and pop’ industry. This means that most management companies are smaller (up to 300 houses under management) and continue to keep old practices even though their business continues to expand.

A manager may feel comfortable showing their own house in shorts and a t-shirt, but it’s not the best business practice. How the manager represents the management company is a good indication of how the manager will represent your home.

Take a look at the manager’s website, current marketing materials, and current listings. You may want to weed out several managers before you give them a call.

ReputationWhere can read testimonials from your owners and tenants? There’s no need for you to work with a manager who has a bad reputation in the community. We have seen that end badly for owners for various reasons. You deserve to work with a reputable manager.

Here’s a recent survey we conducted with our owners where we share the good, the bad, and the ugly! No manager is perfect, but reputation is a big deal…especially when good tenants are looking to rent houses.

SatisfactionDo you offer any guarantees to owners? Sometimes things don’t work out the way we plan. You may decide to terminate management for whatever reason. It’s wise to discuss beforehand if the manager has any performance guarantees.

Those guarantees can be with management, tenant placement or maintenance.

The point is that managers with solid guarantees are putting their money where their mouth is and they believe in their ability to deliver an excellent service to owners.

Management Strategies – This is extremely important because it relates to the systems and processes that a manager has set up to run their business. When you speak to a manager ask these questions regarding their management strategies:

How do you come up with market rent for your house?

What are your collections procedures and process if a tenant is late?

How do you underwrite prospective tenant applications?

These three strategies will give you a sense of whether or not a manager is on top of their business.

2. Result Related Questions You Should Ask Before Hiring A Property Manager

Vacancy RateWhat’s your vacancy rate? You should be curious about the manager’s vacancy rate for their portfolio. These should include houses that are rent ready and those marketing.

Obviously, a manager cannot control if an owner is trying to sell a house or refuses to do the needed work to get a house ready for the rental market.

What you’re looking to do is gauge the manager’s ability to fill vacant houses. Also, understand that an owner’s ability to understand true ‘market rent’ is also important.

Eviction RateWhat’s your eviction rate on tenant’s you place? No one believes an eviction is fun…especially the owner who must suffer months of slow pay and no pay during the process. Every manager knows the percentage of tenants that make it through the underwriting process, are placed in a house, and eventually, get evicted.

This gauges the quality of the manager’s application screening process.

It’s doubtful that the percentage is 0%, but it shouldn’t be at 10% either. This number will not include tenants that were not placed by the management company.

If an owner brings us a house with a tenant already in the home, but we need to evict them, it will not count against us. Other managers will calculate it the same.

Collections RateWhat’s your collection rate on billed rent? It doesn’t help an owner if a lease is signed and then the manager can’t collect the rent! You should be looking for the percentage of the money they receive based on how much they bill.

It reminds me of a Seinfeld episode where a rental car company had taken a reservation, but when Jerry went to pick up the car, they didn’t have it. He complains that anyone can take a reservation, but holding the reservation is the most important part of the deal!

You want to deal with a property manager who not only charges rent but also collects the rent. That’s an essential part of managing your property!

Average Length of Tenancy – What’s your average length of tenancy? This is just a fancy way of asking how long their tenants stay in their houses. The national average is three years, and we’re proud to say that ours is six years. An owner doesn’t make near as much money if tenants continue to move in and move out.

The longer a tenant stays in your home, the more money you should make. This is because:

  • Long-term tenants take better care of your home
  • Less Vacancy = More Money
  • Long-term tenants mean less repairing of the home to be “show quality.”

3. System and Reporting Questions You Should Ask Before Hiring A Property Manager

Team StructureWhat is the team structure in your office and who is responsible for owner communication? First, you should be able to understand who’s on the team through a property manager’s website or their marketing material.

Also, it is helpful to know how the management team structured. In other words, who are you going to be interacting with on the team? Do they have a person (or people) dedicated to owner communication?

Probably what you should know is if you will have a direct contact that is readily accessible. If they do have a dedicated person, how do they typically communicate with owners – email, phone, or some other means?

Available InformationWhat kind of information is shared with you regarding your property? What you want to know is how readily accessible the accounting and property information is for you as the owner. Ask to see an example.

Marketing Your HomeHow would you market my home to find a great tenant? This is a big one. You want to make sure the manager you choose understands how to drive traffic (prospective tenants) to your rental.

We know that it’s a numbers game and so the more people see the house, the more people fill out an application. Eventually, you will find a well-qualified tenant for your house. Solid marketing helps you find that qualified tenant faster.

What unique strategies does the manager use to market your home? What web-based marketing methods are utilized? How many unique visitors does the manager’s website receive weekly?

If they are not doing anything that is unique, the manager is not creating any additional value.

A few additional things to consider when talking to a prospective property manager:

4. Experience Questions You Should Ask Before Hiring A Property Manager

Size of PortfolioHow many single-family homes does your company manage? How many owners does this represent? You want someone with experience managing your home. If a manager has been around for 20 years and only manages 200 houses, it may be a sign that owners come and go but rarely stay long term.

Core FocusDoes your company do anything else besides full-time job property management? You should ensure that your manager focuses on managing your investment full-time. Over the years we have seen more managers become turnkey providers in order to flip houses.

We believe this could lead to a conflict of interest because there is a temptation to place the best tenants in homes you are selling and not in homes that are managed ongoing.

Size of StaffHow large is your management staff? This should not include agents focused on buying and selling homes.

Maintenance CrewHow long has your company been working with your current maintenance providers? Are they employees or third-party contractors? Can you provide me proof that all maintenance providers are licensed and insured?

You don’t want to neglect this critical question because it can come back to you if someone gets hurt on the job or the contractor does a bad job. This can also go back to any kind of guarantee the manager has for their work.

That may seem like a lot to cover, but your rental property is a BIG investment, and you want your manager to treat it seriously.

We hope this helps!