Every Landlord Should Hire a Leasing Agent: Here’s Why
Every landlord has a lot of tough questions to answer. One question that each landlord will face will be whether or not to manage their rentals themselves or to hire a property manager. Some landlords will begin managing their rentals themselves and then transition to a property manager. Others manage their rentals themselves and end up hiring people to help manage their properties. Or some hire a property manager right from the beginning. You have to assess all the pros and cons for all of these strategies and make the right decision that fits with your real estate goals.
Hi, all! Liz back this week to share some recent success we are having with hiring a leasing agent for our rentals. I wanted to share what has been working with the hopes this might get your wheels turning as well!
Before I get on my soapbox to tell you why I think you need to hire a leasing agent as soon as possible, I want to share some background. If you go the route of hiring a property management company to manage your rentals, you probably will not need to hire a leasing agent. However, we decided early on to “self-manage” so that is the perspective I am coming from.
Over the last 10 years, we have built our portfolio to about 115 units located in a 30 minute radius of our office in New Jersey. These units consist of some single family homes, multi-family properties, retail store fronts and small office space. Our property management team consists of a full time maintenance person, tenant relations manager (this person deals with all the tenant issues, maintenance requests, renewals, etc.), office manager/bookkeeper, and both myself and my husband. My husband runs the property management team and fills in on the team in various aspects. I also have a few different responsibilities on the team, one of which has been getting our new leasing agent “up to speed.”
For the first several years, we were managing about 20 units. My husband and I managed these properties ourselves. We were doing everything from the bookkeeping to showing properties (and everything in between). We only hired people for maintenance on our properties. As we grew, we hired a part time bookkeeper and then we hired a tenant relations manager.
The last few years these have been the two key roles that have been "managing" our portfolio, along with both of us, of course. The tenant relations manager has a lot on their plate. They do everything that involves the tenant – processing rental applications, lease signing and on-boarding, delinquency, evictions when necessary, tenant maintenance issues, work order processing, renewals and pretty much all communications back and forth with the tenants.
Over the years, we have tried to use various third party companies, typically real estate agents, to help us lease our units. The results have been fairly good. However, since we manage our own properties, we have never liked the fact that these leasing agents were not part of our “team.” There were some tenants that these companies brought to us as potential candidates for our properties who we did not meet until lease signing. This was unacceptable, and we felt like we were losing control of evaluating tenants (which is incredibly important)!
So, about a year ago, we asked our tenant relations manager to help with the leasing of our units. We would pay her an additional commission to list the properties, schedule the open houses and close potential tenants. This strategy also worked pretty well. The biggest challenge with having our tenant relations person (TRM) focus on leasing is TIME. There is only so much time in the day to do everything. As we added more units, we found that our TRM needed to focus on her core role and didn’t have time for showings and open houses anymore. This did not hit on me until I stepped in over the last few months to help lease some of our multi-family units. I have been taking all the calls and scheduling all the open houses. I realized that this is a role that needs a lot of focus and should be carved out for a new team member.
The other reason we really needed to hire someone who ONLY focused on leasing our units is that we are in the growth mode. We bought over 30 units last year and plan to continue to grow and expand. With managing over 100 units, there will always be some transition of tenants and units. Our goal is to minimize vacancy.
So, after talking it over with my husband, we decided to move forward and search for a leasing agent. The first thing we did (and I highly recommend that you do) is write a job ad. You need to get clear on what expectations you have for this person.
Here is a sample of our job ad we posted on Craigslist:
Sales & Leasing Consultant – Bilingual (Spanish/English) NEEDED
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Are you the following…
• Naturally persuasive
• Achievement oriented
• Like building relationships and delivering top notch customer service
• Positive, high energy, dedicated and trustworthy
If so, the DeRosa Group is actively seeking a part time Sales & Leasing Consultant who is bilingual (Spanish/English)! We are looking for a highly motivated individual with a strong marketing, sales and customer service background.
• Executes on-line and off-line marketing and advertising efforts for all available residential and commercial space
• Responds to phone inquiries; provides complete information on the apartment, the property, and area information
• Presents the property, vacant unit, and amenities to prospects in a professional and knowledgeable manner
• Provides prospects with brochure, rental application, and all collateral material
• Follows-up with a phone call and thank you email within 24 hours of property tour
• Hands over all rental applications for approval; verifies all pertinent information and submit to tenant relations manager for approval
Finding the Right Person
After posting the ad on Craigslist, we received only two applicants, both of which never followed up with us after we reached out to them. We put the word out to our local network that we were looking for someone. Then one day my husband was chatting with one of the real estate agents on our team, and Matt mentioned that we were looking for a leasing agent. He said that it just so happened he did have someone to recommend to us. This person was looking to get into real estate.
So, we met with her and interviewed her for the role. The other key part of our hiring process is having potential candidates complete a “personality type” assessment. I highly suggest that you use some type of assessment to help you assess the role you are trying to fill as well as the prospective team member’s strengths. In summary, here were some of the key characteristics we were looking for:
- Self-motivated, self-driven, assertive (you will need someone who is able to direct themselves – once they are trained!)
- Relationship and people oriented (able to relate and build quick rapport with prospective tenants)
- Sense of urgency (your leasing agent will need to be effective at juggling multiple tasks and able to shift gears quickly)
- Moderate amount of attention to detail (this person needs to be detail oriented enough, but flexible as well)
- High energy (it will be helpful that they have a lot of stamina to manage all the leads and moving parts to the role)
Good news – the person who was referred to us by the real estate agent met all of these characteristics! So, we brought her onto the team. Her main responsibility is to bring completed applications to the office to be processed. This person will receive a half of a month's rent as commission. Both my husband and I trained her on how to put our listings on the online outlets such as vFlyer and Craigslist. We attended some open houses with her as well. Since she speaks Spanish and English, she put our listings in both languages on Craigslist!
First Month’s Results
We decided to start her off small and not give her all of our vacancies. Therefore, we gave her two buildings to focus on. One building was a 4 unit multi-family, and the other was a 10 unit multi-family. The 4 unit multi-family was recently purchased and rehabbed. Our team was able to land two tenants, but there were still two left. The other building (the 10 unit) had one vacancy of an apartment that was recently renovated after a tenant moved out.
After three weeks of working as our new leasing agent, she has been able to bring in three completed applications (one for the 10 unit and two for the 4 unit multi-family), all of which have been approved for move in. She is doing a phenomenal job. One of her strengths — and a “must” for a leasing agent — is her amazing follow up and follow through. She is also terrific at building rapport and trust with prospective tenants!
I am meeting again with her this week to expand her responsibility to leasing all of our vacancies (which include commercial and residential). We will continue to train her and keep communication lines open. The key is to coach and mentor a new person, not throw them out to the wolves to “figure it out” themselves.
We are glad to give up a half of month’s rent to ensure that our units get rented quickly. Whether you are managing 2 units or 50 units, you can’t do everything yourself. And quite honestly, you don’t want to do everything yourself. You are the business owner, and your responsibility is to build and maintain a thriving and profitable business. Leasing units takes a lot of energy and time, and you really need someone (besides yourself) who can focus their energy on this responsibility.
I would love to hear your feedback!
Are there any landlords still not convinced that you should hire a leasing agent?
Let me know with a comment!