You also want to factor in the HOA dues. They can vary greatly. Another consideration is are you comfortable charging your sister and her friends market rate or would you give them a lower rate? There are apartments in the Hermitage/Donelson area that have much lower rents than the newer townhomes. Business with relatives is tricky business. If it were me, I wouldn't do it unless I would be okay with covering their rent every month as a gift if they couldn't/wouldn't pay.
If the unit is in good repair, $1200-$1300 not inclusive of utilities is a very fair price. But for older homes, or those which are a little rough around the edges, that can get drastically cheaper.
A lot of those properties seem to be a bit outside of Nashville proper; you may be able to find town homes in a similar price bracket closer to Nashville, which would likely command a slightly higher rent and have a better resale value- especially in neighborhoods like Hillsboro Village, Green Hills, and West End.
Here are some examples:
In the West End neighborhood, on Vanderbilt's West side:
In the up-and-coming Sylvan Park neighborhood, just south of West End and still just a short drive to downtown:
Check the market in the area you plan to buy in. See what rents are. the charge accordingly. Craigslist or the Nashville Tennessean (daily newspaper) should be a good place to start.
Always use a lease, always always demand a deposit. This is a business now, not a friendship. Friends will walk out on you.....deposits help guarantee against walk outs or damage to your property. If they cant come up with a deposit, you dont lease to them. boom.
A deposit should be at least one months rent. If they leave the place in the same condition as you gave it to them you will return the deposit. boom again. If they stiff you on rent or mess up the place, at least you will have some money.
Keller Williams Nashville, co-founder
Thank you for your assistance Marilyn. I greatly appreciate it.