Never Hire a Real Estate Agent to Rent your Property

July 21st, 2010 · 45 Comments · Commercial Property, Property Management, Rental Property

I occasionally get referrals from real estate agent to rent out places. Quite a few agents will freely admit that they hate rentals. It’s pretty easy to figure out why. They don’t make any money renting after all the splits and commissions. Renting a property is almost as much work as selling one. A while back there were a bunch of real estate agents spamming everyone who posted rental ads on Craigslist and Kijiji.

Hire a Specialist in Residential Renting

I highly recommend hiring a specialist in residential renting. There are a number of companies that specialize just in renting and you should hire one of those. You should hire me.. because I’m the best, but if you don’t want to hire me, hire Speedy Rental Agency. I used to work for them and they’re good too. That’s here in the GTA of course. You’ll have to find someone local if your property is not in the GTA.

How the Business Works

Any rental service charges the same amount. They charge one month’s rent when the property rents. They’ll also kick out tenants that don’t pay rent, you’ll have to pay court costs. They’ll serve all the eviction papers and fill them all out for you as well. If your rental company doesn’t offer this find someone else.

They’ll also pay for all the advertising, do all the showings, provide applications and leases.

We focus on never having evictions. My record is pretty good, for instance until I went to rent/property manage townhouses in South Oshawa. I had no evictions in 2 years.

We also rent almost 100% of the properties we take on in 60 days which is our “listing” period. I for instance have failed to rent 4 properties in the last 5 years I’ve been in business. Those are pretty good odds.

A fair number of times I’ve been asked to rent properties that have not rented using a real estate agent. I rented them usually in short order and I’m not sure why they didn’t rent.

Real Estate Agents Renting

Every time house sales go down real estate agents start to rent property. Last year I got a hold of a statistical document from TREB that showed that real estate agent rent about 50% of all properties they list for rent. That really sucks.

They also don’t offer any additional services such as kicking out the bad tenants they rent to. If you get a tenant who doesn’t pay rent, too bad.

They advertise pretty much exclusively on the MLS site. The problem with this is that the MLS site is not known for rental properties. Then if they do get a call it gets routed to the office and then a few days or hours later the agent calls them back.

Their application process is overly elaborate for most tenants, who ever heard of tenants putting together an offer to lease?  The application itself is too intrusive and longer than necessary.

Their lease is also too long, you shouldn’t need to take your lease to a lawyer to know what it means. Almost every single thing you could write into a lease is already outlined in the Residential Tenancies Act and you cannot contract out of the law. Trying to is just stupid.

Their lease also doesn’t include the required by law Tenant Information Package. The Landlord & Tenant Board is interpreting a tenant not receiving it as the tenant not having to pay the rent until they get it! This is an important omission.

Then there is an important conflict of interest inherent in hiring someone who’s main agenda is getting you to sell your property. That’s how real estate agents make money. I have heard a number of horror stories about this. Basically if a real estate agent can get you a good tenant why should you sell?

There are also a few scammer rental agencies out there, they are mostly characterized by low prices. It’s almost impossible to hire someone to rent your place, pay for advertising and drive out multiple times to your place to show the property, pay for overhead and credit checks for under a month’s rent.

Fake List of Tenants

Another thing people ask me a lot is if I have a list of tenants looking for places. That is almost impossible. Most tenants are looking in a pretty specific area, with rather narrow criteria, for a very limited time. A database for tenants would be good for about 2-3 weeks and only if you have exactly what that person is looking for. No one has this! If they tell you they do, they’re liars. The spam I was getting from the real estate agent boasted this! Everyone writes down tenant info but chances are that by the time you list your property that person already found a place.

Why Agencies Are Better At Renting

The reason why we’re better at renting is because we’re available on the phone, we can occasionally show a place at a moments notice, and most importantly we know how to recognize a decent tenant. Some people never get the hang of qualifying prospective tenants. My friend Norma who works at Speedy Rental has been renting for about 10 years and she’s had one eviction during that whole time. She clearly has superior skill in avoiding bad apples.

The other talent we have is experience. I’m not sure how many properties I’ve rented but it’s likely over a thousand. You get good at it. We see hundreds of tenants. If you have one property with a couple units you’re renting it once every year or two. I rent more than that per month every month, year after year.

Real Estate Agents Are Professionals ?

Another myth about real estate agent is that they are all professionals. I’m not sure when this came about. My way of thinking is that being professional required more than 3 correspondence courses and a week of class. Doctors and lawyers are professionals, they spend about 7-10 years in school. Even licensed carpenters spend two years in school plus several years of apprenticeship. Property managers like me spend two years in school and now they even have university courses. Real Estate Agents are not professionals in my opinion. It doesn’t matter how often they say it, it’s a lie.

My Best Clients

My favourite kind of landlord is the one who’s just too busy to do the legwork of getting a tenant on their own. People have jobs and kids and obligations. People who work odd hours or shiftwork or can’t answer the phone at work, find it extremely difficult to find tenants. You have to be available to show the place when the tenants want to see it. You have to answer calls. If you can’t do those things then get someone who is available.

Some owners also don’t want anything to do with tenants. I have one owner who I do property management for like this. He’s great, he knows what he doesn’t want to do and he pays me to do it for him.

If you’ve just had an eviction you probably shouldn’t rent your place yourself. Like someone coming out of a bad relationship, rebound tenancies can be problematic. It’s best to give yourself some time to heal before renting again. Entering a new tenancy requires trust and if you can’t have some degree of trust in tenants, then it may be better to pass the job onto someone who is competent at selecting good tenants.  You’re at risk of taking on someone who tells you want you want to hear, usually a con artist or scammer. Not Good!

So that’s my take on the subject, don’t hire a real estate agent to rent your place, get a specialist. You can hire me to do it but if you think I’m a flake or you just don’t like me you can use my competitor Speedy Rental Agency.

Happy Renting!

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45 Comments so far ↓

  • Nitric Oxide Pills

    I am not the kind to take the time writing comments on individuals blogs normally nevertheless after stumbling across yours I thought I’d write a quick note to give me a break from work. Needless to say I have gotten a bit sidetracked after sticking around to check out a few of your articles. You’ve got some good observations here, so I am going to add you to my Google Reader for the future. Regards!

  • Mr. Cheap

    I’ve read that RE agents rent out properties just to stay in the good books of the owners (like calendars and pumpkins and the other nonsense they give out).

    If everything works out, they look great (and are hopefully the first person the owner thinks of next time he wants to buy or sell). If things don’t work out, as you say, maybe the owner will become a “grumpy landlord” and sell through the agent.

    I was talking to renters recently who went with an agents and found their place through MLS (they would have been on the agent’s “list of tenants”). The tenants claimed (parroting their agent I’m sure) that anything on craigslist would also be on MLS (umm, no actually, they wouldn’t).

  • Potato

    Yep, can’t agree more: don’t bother with an RE agent to rent your place. From the tenant’s side, we had so many issues with agent-listed places.

    The majority of agents never even returned our calls in the first place. One didn’t show up to show us the place. Another couldn’t decide if the place was actually available for rent or not: she told us after we called that it was for sale only, then called again the next week saying it was for rent after all, then cancelling once again before we could see the place. A few couldn’t be bothered to answer questions about the place, they just wanted to show us what we could own instead (though I was actually surprised that it wasn’t more).

    Then an agent helped my current landlord rent out half of her duplex right after she bought, and “helped” her out by drawing up a completely nonsensical lease, including things about elevator use, and illegal clauses (security deposit, usurious penalty interest for late rent). I warned her that she’d be better off just getting a lease kit from Staples… Heck, with that lease she might be better off with a verbal agreement!

    • Rachelle

      I’ve heard this too Potato. The last time I was renting one of the condos I manage in Sherway Gardens, I had a couple with two kids apply for my one bedroom. They had been looking for a while and were desperate just to get in the building. I told them to look at the MLS for two bedrooms. They said they had but no one was returning their calls. Not all agents are like that. I ended up splitting my commissions with a real estate agent who called me off a bag sign I had posted around the building. She had been looking for these people for months. Granted she could afford to be nice to them, she just sold their old house and they’re waiting for the new house she sold them to be built.

  • eastasenko

    it was very interesting to read landlordrescue.ca
    I want to quote your post in my blog. It can?
    And you et an account on Twitter?

  • Financial Uproar

    Rachelle, I’m curious about your fees.

    Where I’m from in Alberta our local property management company charges $100 per month which includes finding tenants, collecting their rent, depositing said rent into the owner’s bank account, dealing with tenant complaints, calling maintenance and everything in between.

    You mentioned that you charge one month’s rent to find a tenant, show the place, etc. Once the tenant is in place, do you offer a service to collect the rent and take care of the property? If so, what do you charge? Is the property management company here charging enough?

    • Rachelle

      If I do property management I charge an additional 5% of the rent. I make decent money on the rental commission but not on the property management. If all I did was property management I’d need to manage 50 properties to make the same as renting 4 properties. There’s also a heck of a lot of paperwork involved. Plus owner expect an awful lot from their property managers for their $100.

      I am aware that some property management companies don’t charge for the rental, one of the properties I manage I inherited after 6 months of vacancy from such a company. By and large I find that rates for property management are quite low. I’d rather make more money 🙂 The property management I do, I like the owners and that’s why I do it. I do a decent job for them and the properties are in good condition.

      Toronto is also an expensive city to live in, that may be why think the way I do.

      • Todd

        So you admit you’re in this business for the money, nice to see that you finally admit the truth.
        As for colon yourself a professional , a grade 10 education does not qualify you as a professional, and do not attempt to deny your lack of education as I have proof of this fact in your lacking abilities.
        Might as well have everything clarified here regarding you and who you are . Keeping in mind an agent is a college educated professional with a designation , licensing and fully insured for the benefit of the public he serves. You in the other hand place the public in Peril with no recourse in the event you default or make an error in judgement like the bad tenants you place and you have no agency commitment to a landlord / investor who pays you so basically you just take money for a service that is totally self serving.
        And before you respond negatively to this commentary , unless you provide proof of any agency commitment in writing and cannot show licensing or insurability and accountability by way of the fianancial services commission of Ontario then anything you say really has no relevancy. You are like a taxi driver taking a fare and offering a guided tour of the city for additional costs ! Then again that’s unfair to the taxi driver as even he has to be licensed …….

        • Rachelle

          Of course I’m in business for the money, what other reason is there to be in business? There is nothing wrong with making money. I have spend 2 years in college 20 years ago and my diploma is posted right here sorry about the potato quality of the picture. Agents are not college educated nor professional. A professional is someone who has spend 7-10 years in university, not someone who took a few month correspondence courses.

          I actually have a far superior guarantee for my services, I will pay for the eviction for any tenant I place for up to a year. So until real estate agents start actually backing up their tenant placements instead of running away and leaving the owners high and dry, I think I won’t have any problems.

          Proof of agency or licensing doesn’t mean anything if it’s not required. In my case it’s not required. Does that mean I don’t get a right to speak? Nice try.

          If and when property managers get licensed I’ll be the first in line, I’m not in charge of who gets licensed or not. When I got my property management degree it was one of two available in Canada. Now of course there are many more courses available all of which are more time consuming and rigorous than the real estate courses.

          What does FSCO have to do with anything? Real estate agents are guided by RECO. I actually have a written contract/listing with every owner, how is that different from your agency agreement? It’s not.

          Are you drinking and commenting on the internet?

  • mbt shoes

    Thank you for useful info. 🙂

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  • Matthew

    i’d like to rent out rooms to foriegners and was looking for a agent i’m not sure where to look any ideas? i’ve got a few places but wanna concentrate on one for now i’m willing to give 20% to the agent if need be. does anyone know of a place i could find agents i’ll be expanding as the business grows and would like someone i can build a long term relationship with.

    my details are on the website…

    • Rachelle

      You might try posting pictures on vacation websites. No agent I know of can even afford to rent your rooms, advertise them and show them for $200. Plus you’re in South Africa and this website is located in Canada. 🙁

  • Lisa

    Hi, I have a basement apartment that I need to rent out. Do you do this and how much is the charge and what is included in it? I live in Woodbridge, Ontario. It is available immediately.

    Thanks

  • B.J.

    What qualifications do I need to become a rental agent for other people? I am well experienced with managing my own multiple properties and doing repairs for the past 6 yrs. Is this a viable way to earn extra income? My properties have a very low vacancy rate, are located in different provinces and I manage them all so I must be doing something right. They are in BC, Sask, and I live in Alberta.

    • Rachelle

      I’m not sure…here in Ontario anyone can set up a shingle. It’s a lot better if you have that “je ne sais quoi” skill of picking tenants that match the owner.

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  • Dan

    Property managers are real estate agents they couldn’t make it selling real estate so they decided to manage and rent properties because it’s alot easier and less work

  • neetu

    Hi, I have a newly built home in Milton that i would like to have rented. Its approximtely 2900sqft. I would like to know how much houses are typically rented at in a new milton subdivision, and whether you would be intested in managing the property for me.

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  • Sheila

    It is so disappointing when people have to put down others in an effort to try and make themselves look better. How about just letting people know how great your property management business and service is ? Many things on your site about real estate agents are simply not true.

    Many of us agents are good hardworking people and we really care about our clients. We handle rentals as well to offer a full service, we are more than qualified. Besides the initial very in-depth training we have to take new classes every year for our whole lifetime as agents. We help our clients from start to finish and even if a problem occurs at a later date. We are very versed in Tenancy Law. Our pricing is the same as yours.

    Every profession can have a bad apple or two.
    Please don’t paint all agents with same brush.

    • Rachelle

      This in depth training you speak of…I’d like to see proof of that. Last I checked Which was about 5 minutes ago, an agent can be hatched with 185 hours of classroom time and $1470 in tuition. The only course on property management is an elective you can take called principles of property management, which costs $440 dollars and take 40 hours of in class time.

      The OREA application form isn’t even compliant with present legislation, I’ve never seen a real estate agent lease that even included the landlord’s address for service, or the Tenant Information Package. Just this year alone I’ve heard of at least a half dozen agents taking up to 6 months rent.

      Is every agent incompetent? No. But most are quite poor to low average compared to most property management companies out there as far as services offered and due diligence, application thoroughness, legality of lease and so much more.

      I’m sorry Sheila, but your 40 hours in the principles of property management class doesn’t compare to the two years of full time study at an accredited educational institution.

  • Donna

    Rachelle this is just shameful. There are many property managers with terrible skills and many real estate agents to match. I completely agree with Sheila. I have used Realtors and Property managers and have had enjoyable experience with both. I never once found the 3 realtors I used to be lacking in experience. This article is an embarrassing attempt to promote your business. This unethical slander focused on the negatives of one business to make another appear more advantageous shows the caliber of business women you are. Glad I read this before hiring your services.

    • Rachelle

      Here is my response to your comment. I received this comment hours after yours.

      Name: Anil Sikka
      Email: anil@anilsikka.com
      Website:
      Message: We both Can work together
      Here is my offer
      =Offer me Exclusivity of Sales/Marketing of your units
      as Maybe as I will be advertising in different medias some
      people may directly approach you,this kind of arrangement
      can safegaurd my business interests
      =Offer me Commission of 10% on per month Rents as less then
      that will barely cover my expenses
      =Will link my web site to your web site and have to make arrangements
      so that booking can be done on my web site

      We have to find ways to implement above
      As told you I am very much interested in working for you

      I will Love to work with you
      I will be too honoured to be of any help or service to you.
      In case you want to meet me let me know, I will be too
      pleased to meet you

      WEB SITE: http://WWW.ANILSIKKA.COM

      Regards

      Anil Sikka
      Sales Representative
      HomeLife Top Star Realty Inc., Brokerage
      Markham
      Canada
      Cell: 416 871 0388
      E mail: anil@anilsikka.com
      Web site: http://WWW.ANILSIKKA.COM
      Time: May 31, 2014 at 10:53 pm
      IP Address: 99.247.16.144

  • Nek Tenn

    Hi Rachelle, I’m recently hired a property manager to look after a property in the GTA and he’s charging one month’s rent plus HST – is it normal for the landlord to pay HST on one month’s rent?

  • Todd J Burns

    Good Afternoon Rachelle,
    After reading your editorials about Real Estate Professionals I was rather disturbed that a person such as yourself would be a party to such degradation and gossip . As professionals we in the Real Estate industry at times must assume other Real Estate related duties not necessarily done on a regular basis, and I can assure you that my expertise has never come into question when carrying out the duties of Leasing a property for Landlords and management companies alike. Working within a highly regulated industry has always given me pride in my Profession and as within any field of expertise there are some who at times disrupt the natural course of their chosen field with disgrace and shame. Our field of expertise may not require 10 years of study prior to practice , but I can assure you that we are constantly learning and training to better serve the needs of the public in general . No we are not brain surgeons or lawyers , however this does not make us any less worthy to practice in our chosen field as our learning never ceases .
    I am not sure what requirements or regulations a person such as yourself is subjected to so in the interest of professionalism there will be no derogatory commentary . Please understand that my wish for you is to be better informed prior to any further delinquent remarks about an industry that moves hundreds of thousands of families and businesses every year and continues to do so with expertise , dignity and a respect for others in the process . Should you hear of me leasing a property out for john q public or the many property management companies I also do work for, don’t hesitate to pick up the phone and say hello . I am always here to listen , learn and help .
    Thank you .

    • Rachelle

      Dear Todd,

      It’s not a profession. Nor do I have a profession. I do have 2 years of schooling and 20 years in this industry. For my industry there are no requirements. Please inform me which of my facts is incorrect. I know you are upset that I would say something about the business of real estate, but I’ve seen real estate agents do a lousy job over and over again. I just listed a property that has been on the MLS for over three months, that had bad tenants in it placed by the real estate agent. He claimed there were showing but the snow in the front was undisturbed and had no footprints in it.

      • Todd

        Rachelle ,
        Now your derogatory comments are being directly made to me. Firstly , I am a “Professional” , please take the time to learn definitions . Secondly , to say that your basis for putting the agent down was ” undisturbed snow” is ridiculous.
        I truly believe that you should reconsider the commentary , there are always persons who will go along with negative points of view . A true Professional will always make every effort to show both sides of an issue and look to find suitable solutions rather than continue a negative thread.
        It concerns me that you do not feel yourself a professional after 20 years at your chosen vocation. I know that certain individuals who claim to be professionals can let clients down in any category. All the best to you Rachelle .
        “The difference between an amateur and a professional is in their Habits. An amateur has amateur habits . A Professional has Professional habits . We can never free ourselves from habit , but we can replace bad habits with great ones”

        • Rachelle

          If you are not a Dr, Lawyer, or Accountant you are not a professional. You can call yourself a pink unicorn but that doesn’t make you one.

          Unless real estate agents have learned to fly over 20 feet of snow carrying their clients, then the evidence that the snow is undisturbed and 2 feet deep with no foot prints in it, would certainly indicate that no showings were had. You can draw your own conclusions from the evidence.

          “If it can be destroyed by the truth, it deserves to be destroyed by the truth.”

          Carl Sagan

  • GMcDonald

    did you know that if someone views, retains share collects anyones personal information in Canada they have to be privacy certified. fines range from 10k to 100k for each persons information they have viewed, collected retained or shared……this is law in Canada and has been since 1998 as far as I see….do you have this certification……if not you need to stop doing this service….good day I would hate to report you to the privacy commission of Ontario.

  • Marina

    Good day,

    I have leased my property on MLS in Toronto, ON with the agent from Right at Home reality. Due to not satisfied work was done I offered my agent to work also with private sites like Craiglist etc to attract more potential tenants, she refused, so I poster For Rent by myself.
    I have found the tenant very quickly for 6 months rent. Now the agent required one month commission. Is she right? Please advise.

    Thanks,
    Marina

  • catherine

    Hi, I read your blog and respect your opinions, you truly are entitled to them. I didn’t like the part that you are talking trashing real estate agents. If you’re great at what you do then the clients will automatically follow you and do business with you. By trashing talking of other business to make yourself look good, I think that is not a good moral. Just take a look at yourself. Real Estate Agents are professionals because they go through a lot of training throughout the career. I don’t know where you got these false facts about 3 courses. Are you afraid that agents are taking the business from you? Second, real estate agents do care about their clients at least I do. And I’ll do anything for them including helping them find rentals. So please do better research next time.

    • Rachelle

      That’s the entire point of the post. Real Estate Agents are not well educated. This is a fact. A few courses is not an education. You yourself have made multiple spelling and grammar errors in your comment. It’s not “trashing talking” to point out some very valid points about the problem with your business model.

      I got the facts about the 3 coursed from the OREA website. Attending a one day conference every few years is not going to impress me with your “continuing education”

      I’m absolutely not afraid that real estate agents will take my business from me. I wish they would stop loading my doorstep with their problems because they don’t know the rules about their job. Like earlier this year in January an agent sold a tenanted property with less that 30 day closing. This opened up the owner to all kinds of litigation and loss. I ended up having to convince the tenant to move, and work with the owner to close the transaction because she had no idea what to do. That was the agent’s job.

      All could have been avoided by closing the transaction at the proper time, and giving proper notice. None of which was done.

  • Fawad

    You are just bitter that Real Estate agents make much more in a month that you can in a year. And, I think everyone who read your derogatory comments can conclude how professional you are.
    I personally would never work with anyone who trashes another professional just to prove a point. It is like bashing and trashing your ex in front of your newfound love. Perhaps that is who you are!

    • Rachelle

      Dear Fawad,
      To become a property manager I spend 2 years full time in school 20 years ago. I’m not bitter about how much money real estate agents make, I have enough money for a strip of moldy bread and some wilted lettuce for lunch and that’s all I aspire to.

      I had an ex that poured a pot of boiling hot soup on me once and I spent almost a week in hospital and a whack of time in a battered women’s shelter. It’s part of me, and my experience as a person, and I don’t care who knows it including “my newfound love”. Do you think if I survived that psychopath I care what people think?

      I don’t think so either, but thanks for playing.

  • Noah

    I really enjoyed reading this! Do you provide services in Ottawa?

  • Luke

    Found your blog a few days ago and I’m doing a full immersion.
    Regarding your post I noticed that nobody defended the RE “profession” but the RE themselves.
    At the beginning of the year I used the services of a very successful RE agent with almost 20 years in business, owner of a RE agency. He sold a bigger house for me and helped me buy a smaller property for renting. He offered to help me find a tenant and, before I knew it, while I was doing major renos, he posted it on Kijiji. Gave up my summer vacation and worked 14 hours day after day knowing that he found a tenant for the end of the month.
    End of the month comes and we get to meet the tenant to sign the lease (form provided by the RE) and collect the first and last. The fact that no money was collected and no keys were provided, despite the signed lease, was easy for me to get over it.
    What scarred me was the realization that that tenant, screened and choosen by a RE had no address on the lease, there was no credit check, no renting check, no income check nothing. When I asked him what he thinks about the tenant he said he has a good gut feeling about him.
    I started emailing the tenant asking about all the missing info and the reply was that he agreed to pay for 12 mo ahead therefore there is no need for checks.
    That moment I started doing my homework like I should and read everything I could find about landlording including the RTA, dumped the RE and choose a property management company to screen my tenants. One month later I got a great tenant.
    Looking back I could not believe the gross incompetence displayed by the RE when providing the tenant searching services, from the illegal clauses (damage and keys deposits, payments for more than first and last, etc) in his lease form that could expose me to serious troubles with the Tenants Board, to the close calls I had where I could end up with terrible tenant.
    In the end, my first rental investment started really well but I learned my lessons. If you sell a house you most likely need a RE. But if want to rent your house let a professional property manager to do the screening or even find the tenant.
    You could save money on both situations if you choose to do it yourself, but you will have to trade something for it.

    • Rachelle

      Yes, so many illegal clauses, I had a client rent through real estate the tenant paid a pet deposit and immediately sued the Landlord at the Landlord & Tenant Board for the money back. I just wish they would learn the rules about renting if they are going to do it.

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