Managing rental property in Nashville, Tennessee, has proven to be a profitable venture for in-state and out-of-state investors. With Music City drawing in new residents, the demand for rental housing is still high.
However, managing the day-to-day operations of an investment rental can be quite overwhelming for owners who have multiple rental properties or live far from their investments.
That’s where expert property management takes over.
But prior to giving over the keys, you need to know what you’re paying for. Property management fees can be quite different, and knowing what to anticipate facilitates planning your budget and choosing the best company.
This article breaks down all parts of property management fees in Nashville so you can have an accurate idea of what you can purchase.
1. Typical Property Management Fee Range
The most basic and common fee for managing property is the monthly management fee. In Nashville, this is usually in the 8-12% range of gross rent each month.
That would mean, for instance, if your rental home rents for $2,000 each month, you can expect to pay anywhere from $160 to $240 each month to your property manager. Some companies charge a fixed monthly fee, although percentage-based pricing is still the norm in the industry.
This charge usually pays for basic services such as collecting rent, communicating with tenants, financial reporting, and managing maintenance requests. It can feel like a big chunk of your paycheck, but factor in the time and stress relief it saves.
In addition, some property managers include extra services—such as regular inspections or minimal legal services—into this basic fee, while others charge for them separately.
Thus, if you’re exploring your options for property management in Nashville TN, it’s wise to compare what’s included in the monthly fee across different companies.
2. Leasing Fees for Nashville Landlords
Leasing fees represent another typical expense of managing property. Leasing fees are usually charged when you get your property leased to a new renter.
In Nashville, you should be prepared to pay a leasing fee of anywhere from 50% to 100% of one month’s rent. This leasing fee covers various services such as advertising for rent, showing the rental, tenant screening, and preparation of lease papers.
For instance, assuming your unit rents for $1,800, you can be charged from $900 to $1,800 for this one-time leasing service. Although this sounds expensive, note that placing tenants is time-consuming and an extremely vital process.
3. Flat vs. Percentage-Based Fees
When choosing a property management company in Nashville, you usually have the option of either a percentage-based charging structure or an overall flat charge. Both have pros, depending on rental income and your requirements.
A flat fee means you pay an identical monthly charge, regardless of your rental unit’s rent. This could be in the form of a fixed $150 charge each month on each property. This can be advantageous to owners of high-rental properties because they maintain constant and predictable maintenance fees.
4. Additional Costs and Charges
In addition to the usual monthly administration and leasing charges, other expenses can be charged based on your property and the service menu of the managing company.
One of them is usually the lease renewal charge. When your current tenant re-signs for another lease instead of vacating, various managing companies charge anywhere from $100 to $250 for renewal. Although this can appear unnecessary, usually, all this does is charge for market research to modify rents according to current market trends, legality checks, and new lease agreements.
Another charge to look out for is maintenance supervision. When maintenance is necessary, your manager can oversee the contract workers and manage billing. Some businesses roll this into the month-to-month fee, while others charge per hour for project administration. That can be anywhere from $50 to $100 an hour, depending upon the complexity of the work.
Onboarding fees also occur when you initially sign an agreement with a management company. These setup fees can be anywhere from $200 to $500, including initial inspections, software setup, and document preparation. Some companies can have this charge excluded from an offer in exchange for a promotion, so ask them about this.
Routine inspections, i.e., quarterly walk-throughs or an annual conditions check, can be included in your monthly charge or an additional charge. Regular inspections ensure any potential maintenance problem is spotted so they do not become an expensive fix.
There can be additional eviction charges if a tenant has to be formally removed. This involves court fees, organizing legal representation, and possible presentation at hearings. Eviction charges can fluctuate but quickly add up to over $500.
Also, watch out for exit fees if you leave your agreement prematurely. These can be costly—sometimes as high as several months’ worth of management fees—so pay careful attention to contract details.
Wrapping Up
Contracting out property management in Nashville, TN, can be one of the best choices a landlord can make—but at a cost that must be properly weighed. With any combination of charges for monthly management fees, leasing fees, maintenance supervision, and myriad other service fees, knowing what you’re getting for your hard-earned cash is essential to maximizing your level of returns.
By taking into account the nature of the property, its status, your level of participation, and the services to be provided, you can select a management company that not only suits your budget but maximizes your property’s performance.