For rental property owners, having a trustworthy and experienced property manager at their side is often one of their most valued assets – especially for out-of-state investors. Having someone with boots-on-the-ground knowledge, who answers calls 24/7, and who understands the importance of both tenant retention and protecting your investment can help make the investing experience successful. With almost half of the city's residents living in rental properties, Nashville is an excellent choice for investors looking for their first (or next) investment property. However, this service certainly isn’t free. Unless you’re a DIY landlord and the fee is your time, property managers all come with a price tag. Keep in mind that prices will likely change depending on location and property type, too. As an investor, you may be wondering, “just how much do property managers cost in Nashville?” There are a few different types of fees, so we’ll go over what they mean as well as any additional factors that property managers may take into consideration when setting their prices.
Leasing Fees for Nashville Landlords
For most property management companies, there is a separate leasing fee that is charged on top of the standard property management fee. Typically, you can expect this to be a percentage of the first month’s rent. Some property managers in Nashville have tier subscriptions, where they will offer discounts on the leasing price, though. This is calculated separately because it’s outside of the day-to-day management tasks, typically only happens once per year (or much longer if the tenant stays long-term), and some owners may only want the leasing service, or vice versa. Or, a property management company may not offer marketing and leasing services at all, so it’s best to double-check with any given company if that is something you want for your property.
Flat vs. Percentage Property Management Fees
The property management comes in one of two forms: percentage or a flat-fee. With the former, a percentage is taken out of the owner’s rental income. So, the amount is determined entirely by the rent rate. A flat fee, on the other hand, is unchanging. The fee structure that a property manager uses can depend, and sometimes they might even offer both. If this is the case, then it typically means that:
- Whichever one is higher will be used. For example, maybe a company offers a percentage fee of 10% as well as a flat-fee option. The percentage fee will only be used if it’s more than the flat-fee amount.
- The management team has a tier-structured system that either uses a percentage or a flat-fee depending on factors such as the amount of properties an owner has and the amount of services that are included in that tier.
Repairs and Maintenance Fees
Depending on the company, there may be fees associated with maintenance and repairs. The property manager will handle all coordination with the contractor making the repairs while also keeping you informed, which takes time and effort. This fee is typically a percentage of the overall maintenance bill. In some situations, PMs will have in-house maintenance and that additional up-charge fee will be waived. However, there may still be a percentage markup on the materials purchased and an hourly rate for repairs.
Leasing Renewal Fees
Alongside the leasing fee, there is also typically a lease renewal fee. If your tenant’s lease expires and they want to renew, Nashville property managers will usually have a fee to coordinate that renewal. However, unlike the leasing fee that’s based on rent, the lease renewal fee is typically a fixed rate. The amount will depend entirely on the company. While most take a fee, there are situations where that fee is waived. This is typically with an upgraded package.
Onboarding Fees
Some Tennessee property managers will charge an onboarding fee for new owners and properties. These fees can include:
- An owner fee
- A per-unit fee
- A duplication fee (for keys, documents, etc.)
Some PMs will either waive these fees or only charge one fee for both the owner and the tenant, but it’s best to ask the company in question and find out what their unique onboarding fees are.
Eviction Fees
While the leasing and pre-screening processes exist to hopefully prevent an eviction, there may be times when one is simply unavoidable. If the tenant stops paying rent, causes damages to the property, or are regularly breaking the lease agreement, you may be left with no choice. Some property managers offer an eviction policy where they handle all of the proceedings. In certain cases, they may not charge fees for eviction, but that is usually only included in an upgraded plan. Note that Nashville property managers will usually include a charge-up fee for evictions.
Routine Inspection Fees
Routine inspections are a critical part of maintenance. Inspecting on a regular basis ensures that safety codes are up-to-date, maintenance issues aren’t left untreated and causing more damage to the property, and that the tenants are abiding by the lease agreement. However, these inspections often come at a price, depending on the plan. Some upgraded plans might include routine inspections at no cost so, if this is important to you, double-check before committing.
Contract Termination Fees
For many PM companies, ending your contract early can come with contract termination fees. Some companies, like Evernest, for example, have a 100% Happiness Guarantee, where you can cancel at any time at zero cost. However, if the Nashville property management company you choose does not come with a guarantee, then you will most likely be met with a penalty.
Additional Factors
Given that there are many different types of properties to rent, there are a few additional factors that can impact what the pricing may look like for you and your specific unit(s):
Types of Property
The type of property you own can make a significant difference in management fees. If you have a multifamily property for example, then you will most likely see very different pricing. In these cases, the cost will likely be on a per-unit basis.
Size of Property
If you own a larger property, there is essentially more to manage. This means more items to repair, more property to take care of, inspect, etc., and a higher rental rate. For percentage-based pricing models, this could automatically raise the cost.
Condition of Property
It may cost more to hire a property manager if your property is in poor condition, since it will take more work to get it rent-ready. It will also likely have more maintenance issues compared to a newly built or renovated model.
Neighborhood Rating
Along with size, the neighborhood class that your property falls in will help determine rental rate. Whether that rate is higher or lower will often affect the cost of a PM.
Market Competition
Market competition plays a big role in how much property managers will charge. If there’s more competition, PMs will often lower rates in order to attract more clients.
Extent of Services
At the end of the day, the extent of services will play the largest role in how much you pay. If you’d only like leasing services, that will cost a lot less than a full-time property manager with an eviction plan, proactive maintenance, etc. What you choose comes down to your individual needs and budget.
Final Thoughts: How Much do Property Managers Cost in Nashville?
From types of fees, package tiers, and plenty of optional services to choose from; we understand that there’s a lot to consider when choosing a property management company. We’re here to help you keep the ‘passive’ in ‘passive income’ and really allow your investment to do what you intended, without the headache of day to day maintenance and coordination with tenants. If you’d like to learn more or are ready to connect with our Nashville team, please be sure to reach out or take a look at our Nashville pricing page.
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