Rental Agents Calling Me

General Landlording & Rental Properties
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Rental Agents Calling Me

Alex O.
Chicago, IL · Member since 2011 · 19 posts · 2 votes

Hi All,

I just wanted to get your thoughts and insights. Every time I list an apartment for rent, I always get solicited from rental agencies and agents wanting a month's rent to take over listing my unit. I don't see a lot of value added for their fee, as most of these people just spam CL like crazy. I can do that on my own!

Lately, I've gotten a new tactic, an agent calling and saying they have a client that would be either perfect for the space or is interested in seeing it. I've always caught them off guard by saying that while I won't pay an agent's fee, that if they really think it's in the best interest of their client and the place is perfect, they are free to give them my number. Usually there's some silence and a "I'll let them know". Of course I never hear back.

I was wondering if this happens to you, or if you actually think they have a real prospect for the property? If I didn't value my time so much, I'd actually call their bluff and see if they put on a show by bringing someone out! Do you think there's real value in using these agents? I know they will put it on the MLS, but how much value does that really add beyond the usual free to me marketing tools?

Thanks!

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Steve Babiak
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
14y

Find out the typical payment to an agent for filling a rental. In my area it is half a month's rent. So when I get one of those calls, and my prospects aren't doing too well, I can give them the lockbox combo and let them show it when I'm willing to pay out that amount of commission for a placement. When I have an abundance of prospects, I tend to take the same approach as the OP.

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  • Dave M.
    Residential Landlord · Chicago, IL · Member since 2012 · 356 posts · 81 votes
    14y

    The ones who usually call me are from the apartment services. And yes they may have a prospect and will likely fill your apartment. But it will cost you a month's rent like you mentioned. That's basically another 8% a year in overhead.

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  • Phillip Dwyer
    Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
    14y

    Alex O. I'm one of the guilty ones, but I had a waiting list of people for a unit type in a popular condo complex.

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  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    14y

    Find out the typical payment to an agent for filling a rental. In my area it is half a month's rent. So when I get one of those calls, and my prospects aren't doing too well, I can give them the lockbox combo and let them show it when I'm willing to pay out that amount of commission for a placement. When I have an abundance of prospects, I tend to take the same approach as the OP.

    1Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    14y
    Originally posted by Alex O.:
    ... I know they will put it on the MLS, but how much value does that really add beyond the usual free to me marketing tools?
    ...

    Unless they have you sign a listing agreement, they aren't permitted to place your unit on the MLS.

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  • Shahid Danyal
    Dubai, Dubai · Member since 2012 · 5 posts · 3 votes
    14y

    I have an agent that is with me for some time now. He takes 5% every year from the rental and is looking after all communications with the tenants from finding to renting out, to paying regular visits to look after the property, and to act on my behalf in disputes. So far it has worked fine for me.

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  • Mark H.
    SFR Investor · Phoenix, AZ · Member since 2009 · 484 posts · 181 votes
    14y

    In my area, even being an agent, I still have to pay the tenant's agent fees - on a $1k SFR, that might be $300-ish, plus my broker wants $100-ish for pushing the paper. It's been money well-spent so far, I got tons of mls showings & almost no response from CL and Postlets on my own rentals.

    Unless you're doing tons of rentals as an agent, even a month's rent isn't hardly anything after the split and expenses. When you factor in the time to write ads, take pics, hang lockboxes & chase all the paperwork around I'd gladly pay a full months rent (assuming it was done well).

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  • Townsend Derick
    Real Estate Agent · Fort Worth, TX · Member since 2011 · 53 posts · 23 votes
    14y

    Alex, When people call and ask can they manage your property and then a random agent calls and say they have a client that may be interested in your home that is two different things. So why blow an agent off if they have someone that may rent your home. He paused when you said no compensation because that is not logical. Basically you want him/her to find you a tenant for free? Why wouldn’t you want to compensate someone who brings you a quality tenant? The whole month or even half month ‘s compensation is a bit much so I understand your gripe in that regard. If I find a qualified renter for you I want a minimum 25%-35% of the rental amount depending on the price point. The agents that call just wanting to show your home are not trying to manage it.

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  • Alex O.
    OP
    Chicago, IL · Member since 2011 · 19 posts · 2 votes
    14y

    Townsend Derick I appreciate the input, but I never mentioned anything about PM solicitation; I've gotten those as well, but don't find them a good ROI for me right now. The only people here in my area that really use legit agents (that post to the MLS and are part of actual brokerages) are those homeowners looking to rent out their McMansion or high end condo. The $6k/mo rent prospect isn't usually on CL, so I get it.

    The reason I blow off an agent, and I don't know what it's like in your area; but here, we have over a dozen rental agencies in just my local neighborhood region and hundeds of "agents". These agents aren't really licensed and the sole hiring requirement is if they can fog a mirror. They will also not give you access to the MLS; they will use CL and Oodle! Most of the agencies have horrible yelp reviews and worse reputations; they are known for giving landlords BS background checks and not being good partners. Their clientele is folks from out of town who have no clue about the neighborhoods or the city. They'll get them once when they come to the city and then they wise up! Plus they all want their standard one month's rent fee.

    To them it's a numbers game, a cattle call of prospects meets a cattle call of rentals. Management companies generally use these services just because of their scale. But an agent who trolls CL, sees my ad that says "no agents" and calls me with their supposed prospect, is just trying to solicit me for business and bring my unit into their pool. To me, I'd rather drop my price a bit than give out a month's rent upfront. It would cost the same or less, but I would be losing that profit over a period of months and have the chance to jack the rent back up on renewal.

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  • Mark Purtell
    Real Estate Investor · IL · Member since 2012 · 6 posts · 3 votes
    14y

    A lot of these agents are residential real estate agents who do leasing as a way to supplement their business of buying and selling houses, so don’t be surprised if they try to induce you to expand your growing real estate empire.

    There are companies that deal only in finding tenants for residential property. Their niche is finding tenants, not selling real estate. These companies provide the total package of advertising and showing the unit as well as doing background checks and signing the lease. Their entire revenue stream is dependent on finding tenants with landlords who will use them again in the future, so their reputation is extremely important for their survival.

    Advantages of Using a Leasing Agent:

    Saves you time of showing the unit, getting stood up at showings, and fielding phone calls for information on the unit.

    More exposure to your unit and increased odds of getting it rented quick.

    Be wary of any agent that wants you to sign “an exclusive” agreement with them. If you find a tenant on your own, the agent could demand payment for finding a tenant if you have an exclusive agreement. Look for the wording “Non-exclusive agreement” in their contract and confirm verbally with them that if they don’t produce a high quality tenant who you approve of, they do not get paid a commission.

    Disadvantages:

    The agent will not be there to help you when the tenant stops paying rent in the second month, so it is up to you run your own background check if you are not satisfied with the agent’s check of the prospective tenant. Don’t be afraid to question the background search of the agent. Ask for documentation on the tenant instead of accepting his line “I got a great tenant here, you should rent to them and pay me my commission”.

    An average of one month’s rent commission can really put a dent in your cash flow, but so can a month of vacancy. I will often use leasing agents while advertising the place on my own too. This gives me even more motivation to get the place rented as I race the agent to find a quality tenant and save myself their commission.

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