Editor’s Note: This biweekly sponsored column is written by Rick Gersten, founder and CEO of Urban Igloo, a rental real estate firm that matches up renters with their ideal apartments, condos or houses. Please submit any questions in the comments section or via email.
While there are certain advantages of having an investment property, being a landlord can certainly be difficult at times.
When you have a great tenant and you are attentive and responsive to maintenance needs, owning a property can seem like a piece of cake. But what about when it comes time to put your property back on the market to find a new tenant?
There are quite a few steps to renting a property: marketing, showing, tenant screening, and preparing lease documents. Some landlords may enjoy the process, but others just want their place rented quickly so they don’t lose money. So, how do you get your property rented quickly with the least amount of hassle?
Hire a real estate agent. Here’s a list of reasons why hiring an agent is well worth the money:
Time – What is your time worth? When you are working to rent your space on your own you invest a lot of your time — time off work to show your property, time during work to answer emails and phone calls from potential renters, time after work to market your property.
How many of those renters that you take the time to show your property are just browsing? How many didn’t read your ad and called to ask questions you already answered? If you add up the hours spent dealing with these issues and put a value on it, it may likely come out to more than the fee paid to an agent.
Resources – How do you market your property? Word of mouth and Craigslist?
An agent has several outlets for marketing beyond Craigslist. They can also add your property to the Multiple Listing Service (MLS) to open it up to agents from other brokerages, which will likely result in a faster turnaround. Not to mention, the agent may already know a renter who is looking for a space just like yours. An agent will also be able to screen potential renters, run credit checks and prepare lease documents in a more efficient manner because they do it every day. They manage the questions, negotiations and issues that may arise during the process. In addition to that, they likely have a more rigorous screening process which will help ensure qualified tenants.
Lastly, the agents are going to be up to date on the current laws and regulations with regards to Landlord – Tenant issues in your area, so they can help you navigate that process to be sure you are compliant. Again, it’s about saving you money and headaches down the road.
Turnaround – How long does it take you to rent your property? If you hire an agent as soon as you know your property is going to be available, you increase the likelihood of having new tenants move in immediately after the current tenants move out.
If you don’t hire an agent right away, the following example shows the possible cost. Say you rent your property for $2,000 per month. Your current tenant gives you a 30 day notice to vacate. You decide to try to market your property on your own. After those 30 days are up, you still have not found a qualified tenant. Every day your unit sits vacant it is costing you $66.67. So, after 45 days from the original notice you decide to hire an agent. You’ve already lost $1000 in rent. You hire an agent, and they find you a renter quickly, but after all is said and done, that renter still doesn’t move in until 30 days after your previous tenants moved out. So you’ve lost a full month’s rent, and you pay the broker fee, which is generally equivalent to one month’s rent.
You are out double what it would have cost you if you had hired an agent from the start.
When hiring an agent, be sure to find someone licensed and knowledgeable about your market. Ask a lot of questions. Ask how many rentals they work with on a regular basis. Find out how long it takes them in general to rent out a property. What avenues do they use to market your property? What type of screening do they do?
Ask what to expect from the entire process from signing up to showing, to negotiation and down to lease signing and turning over keys. What happens if you find your own renter? Do they still charge you their full fee? Will they help you with the screening and lease process if you do find your own renter? Talk to people you know, and ask for a recommendation. Not all agents are created equal. Once you do find a great agent, you can hopefully relax and let them handle the rest of the process.
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