If you are purchasing an investment property in Nashville, it’s probably the best time to make the move. Rents are continuously rising, while there’s a huge demand for rentals due to a steady influx of young population into the city. And, since the property prices are on the rise with no indications of a slowdown in the near future, your new acquisition is going to build equity over the next few years.
However, what you need to keep in mind is that a rental property comes with several responsibilities. You not only have to ensure its upkeep, but also follow other obligations like listing your rental, marketing it, screening tenants, collecting rents and keeping a track of financial records.
If you are time-poor or find it difficult to cope with these responsibilities, hiring a property manager can be a viable option for you. Though a part of your income from the rental goes to the manager, your job as a landlord becomes much easier. The trick is to hire not just any manager, but one who offers the best terms and conditions that suits your situation. Here are a few things for you to consider when hiring a property manager:
Ensure manager is qualified as per Tennessee-specific laws
A property manager who takes care of key responsibilities like leasing, renting and collecting rents must have a broker’s license to performer these duties in Tennessee. However, a salesperson working under a broker may also engage in such activities. Rules are a bit different for apartments, duplexes and residential complexes. You should make sure that the manager you are hiring is legally qualified and licensed to perform various tasks related to property management.
Conduct a background check
Finding out the eviction rate for the properties being currently managed by the agency you are considering to hire is the best way to determine whether it’s a good choice for you. A high eviction rate means that the manager doesn’t screen tenants properly. Besides, you should try to get feedbacks from the agency’s existing clients. You should talk to them about their experience while working with the agency.
Determine how the manager will handle the property’s upkeep
There are two ways property managers may charge you for repair and maintenance. They can either hold back a certain amount of money in reserve or deduct the expenses from monthly rental income. You would like to know whether the manager will keep you informed and seek your approval for major repairs.
Can you afford the manager?
Make a realistic assessment of your income and expenditures and then determine if you can afford the fee for property management. It varies from agency to agency, but it’s generally between 8% and 10% of your monthly rental income. However, remember that an agency offering the cheapest rates may not always be the right choice for you.
What tasks will the agency handle for you?
Before hiring a property management agency, you need to get all the agreements between you and the property manager in writing. Hire an agency that can provide services tailored to your needs and charge you accordingly.