I'm not sure but it seems unethical for a management company to ask me if I want to authorize a "agent incentive" in order to get my rental property rented. This company is also a real estate office and they use their agents to show rental properties in addition to selling properties. What I don't like is this fee ($150, or $300 double incentive) almost gives the perception that if I don't authorize a agent fee then my rental will go to the bottom of the list and never get shown. Is this normal practice out there?
I suppose it depends on your market. In mine, the agent incentive for a showing agent typically comes out of our lease up fees, although I suppose we could set it up to be an extra fee. Usually, agents are paid 50-300 to get a property rented to their client. It does affect how much an agent is going to show your home. I won't show rental properties at all anymore (except for the ones I manage) because of the low fees. I would never show a $50 one. I told renters that upfront, and I usually did it on retainer with the agreement that the tenant would make up the difference to make the showing fee $300.
Never heard of that. Sounds sketchy.
Absolutely that is not normal practice.
Your property management agreement should include a section about rentals. The management company is responsible for renting the property, and they get a fee for doing so. In my market the leasing fee is generally 75% to 100% of the first month's rent.
If the property management company chooses to use a real estate salesperson to help in the leasing of the property, then that's their choice, and they can split the leasing fee with the agent.
Honestly that and many more reasons was why I manage it myself. I am honestly not surprised. When you think about it $50-$100 to do all the foot work of a "sale" with none of the profits have no incentives.
I have been able to handle my rentals long distance through advertising through postlets and other sites. I had an agency tell me it would take me 30 days to fill a house, mine I have sit empty. Things like this make me "scratch my head".
At the end of the day, if your unwilling to do it yourself, they are the best company, you have to play their games!
Thanks for the feedback everyone. Some good points have been made. This is probably a necessary evil when I can't manage the property myself and also when the agency has lots of vacancies, which is the case. In order to compensate time/footwork spent showing properties it makes sense to provide a commission. I guess the $50 lease up fee just covers the paperwork shuffle and not the hours spent showing the property.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing