The Kestner Team

If you are an out-of-state Landlord, a property manager is a must. There are property management companies in abundance ready to take the burden off your shoulders. In the Middle Tennessee area, property management fees generally run between 7 - 10% of the monthly rent. Some companies may charge additional fees for advertising, etc. There are many advantages to using management services - they place and maintain the advertising for you, show the property to prospective tenants, give a sales pitch, review applications, screen applicants, conduct background checks, prepare lease documents, and stay aware of all of the legalities.

There's no scientific method to setting rent - it just takes some research, market savvy, and legwork. The best place to start is by looking in the real estate section of your Sunday newspaper. It's a good idea to look at similar properties (of comparable square footage, amenities, and age) in your area and determine what the rent range is. Is your property in a trendy part of town? Close to the freeway? Near good schools? Within walking distance of a shopping center? All these factors can influence the rental range.  However, looking in the newspaper a couple of times is not enough. It pays to consistently track the local market. Supply and demand are factors to consider too. If your property is near a large college campus, for example, there is a constant high demand for rentals. However, even if your property is in a trendy or high-demand area, common sense dictates that if your property is in disrepair you will not be able to ask the same price as a tidy, well-kept, and regularly maintained property.  Other concerns include your property features. Square footage, floor plan, and even the view influence the rental rate. Basic amenities like dishwashers, clothes washers and dryers (or hookups), balconies, fireplaces, covered parking, and cable TV have a great effect on rental rates. A simple way to increase the value is to add some of these amenities to your property. It can often be as simple as a coat of paint, some extra flowers on the grounds, or making sure the property is sparkling clean. There are market factors to consider as well. For instance, when interest rates are low, more people will be in the market to purchase a home. When rent is equal to or exceeds a mortgage payment, tenants will do the math and realize it makes more sense to buy.

After all is said and done, testing and tracking is a time-honored way of setting rent prices. Err on the high side, however - it's easier to lower prices than to raise them. And finally, don't be afraid to offer incentives when the market is soft - even small offers like a free month of cable TV, one day rental for a U-Haul, or a gift basket can tip the scales in your favor. 

Again, we do not recommend self-managing property. Even if you live in the same town, being a landlord is not to be taken lightly.  Owning investment property has many advantages and can lead to many financial benefits. However, becoming a property manager can add many more headaches than you are ready for. We highly recommend the use of a professional property manager and are happy to help you find one. Nina was a commercial property manager for 20 years and knows how difficult a job it can be.