Zillow charging listing fee. Managers trying to pass it through

[Michael Wolffs]

Apparently Zillow (the corporation) is now charging a fee to list rental on it's several sites.  This is predictable.  They're justifying this to the managing agent / broker community by telling them to pass this through to their customers (meaning us.)

My understanding, and this goes back to the old newspaper ad days, is that advertising was paid by the broker.  It was part of the service.  Do we have any long time landlords here who remember how this was handled back then?

Now it's years later, and Zillow is pushing this to go through to the owners.  Does this constitute a change in relationship, and should the owners be giving the brokers/managers pushback on this?

[Russell Brazil]

The cost will get passed to landlords one way or the other....either through directly paying the fees, or through an increase in the cost their agents and property managers charge. Take a relatively small property management company that manages 1,000 units. If the typical tenant is in a unit 3 years, this equates to over $1,000 per month in cost, on a sector that operates on razor thin margins already.

[Bill Brandt]

Paying for advertising has been the norm for the 20 years I’ve been doing it in Vegas. Remember you’re also paying for their staff to create and place the add. If this is your biggest concern you are living large. I think I’ve been charged $20 a few times and $40 once over a dozen properties and 20 years. 

Wait until you get the “main water line broke at your rental, it’s $5,300” or the “toilet supply line busted in the middle of the night, better call your insurance company, the emergency clean up guys are there now...” call. Then this won’t bother you. 

[Michael Wolffs]

It's not that it's my biggest concern.  It's, as you say, a piddling number at this point. But there are two issues I saw with this.  First, while it's low now, do you not think it's going to go up over time?  And two, I saw it as a paradigm shift in the relationship.  But this goes back to before I was directly in the business, so I might have been wrong about this.

[Wesley W.]

Seems to me, this is what you pay the PM the "lease up"/placement fee for, which is typically up to one month's rent.  Included in that, one would think, would be the cost of marketing the unit.

[Michael Wolffs]

@Wesley W. That was my initial thinking also.