Learn more about Chattanooga Property Manager's Fees and Pricing
Renting a 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 managers fees and pricing?"Chattanooga property management New 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 managerss will charge what's called a leasing fee once they have placed a new resident 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 residents
- 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 residents 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 Evernest. 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 residents for months while you try to advertise and screen residents yourself. The price of one month’s rent can cover hours of planning and work, and alleviate your stress about making the wrong resident 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 resident and property:
- Processing and collecting rent
- Communication with residents
- 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 managers might charge only during resident occupancy. In this case they will stop the management fee when the resident 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 resident 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 resident 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 resident. If they do, we begin reaching out to the resident 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 resident over poor maintenance habits. Many 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 Evernest, 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 resident, 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.
