Spencer Sutton -
Tuesday, May 22, 2018
Are you considering hiring a property manager in Nashville?
In 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?
It’s our experience that most owners underestimate the amount of maintenance that their property needs.
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.
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
- 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.
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:
- Do you offer any guarantees with your services? A manager could guarantee tenant performance, maintenance, or some other aspect of their management services
- What is your eviction rate? The fewer the evictions, the better their screening process
- What is your occupancy percentage? If they have a high percentage of vacant houses, their leasing may be lackluster
- What is your tenant screening process? Ensure you believe they are correctly underwriting your tenants
- 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.