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. I do it too, 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? Â 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. Â 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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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!
I’m always glad to hear you like my insights and opinions
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).
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!
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.
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?
Yes
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?
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.
Thank you for useful info.
Same horrible tenant found through a Realtor:
Landlord’s nightmare
http://www.torontosun.com/news/columnists/michele_mandel/2010/01/07/12377326-sun.html?comments_page=10&id=12377326#/news/columnists/michele_mandel/2010/01/07/pf-12374306.html
and not once but twice. Again through a Realtor.
The Bentley-driving tenant from hell
http://www.torontosun.com/news/columnists/michele_mandel/2010/08/20/15092061.html
Your mileage will vary.
Holy moly.
Tenant Locator Property Management Toronto Apartment Rental | Landlord Rescue // Aug 28, 2010 at 6:01 am
[...] offer this service in cities. In tough real estate market times, real estate agents all flood the rental market renting properties. Property management companies also usually charge a tenant location fee on top of their management [...]
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…
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.
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
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.
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.
Real Estate Agents As Professionals Finally Put to Rest | Property Rental Agency & Property Management Services - Landlord Rescue // Mar 24, 2011 at 1:55 am
[...] got a phone call a few weeks ago from a fellow property manager informing me that my article Never Hire A Real Estate Agent To Rent Your Property was not factually [...]
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