What is the Usual Fee for a Realtor Finding a Renter for a Landlord?
written by: Valerie Tandoi•edited by: John Garger•updated: 3/8/2011
What is the usual fee for a Realtor who finds a renter for a landlord? The answer to this question varies depending on the area you live in and the services you are requesting.
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Usual Realtor Rental Fees
If you are becoming a landlord for the first time, it can be both exciting and a lot of hard work. If you are having trouble finding a tenant, enlisting a real estate agent can be a fast and easy solution to getting a renter into your property. Although using a real estate agent is helpful, it is important to remember that there is a cost that accompanies this service.
So, what is the usual fee for a realtor who finds a renter for a landlord? There is no specific number or formula to answer this question. One popular method that many real estate companies use for their rental services is to charge either half a month's rent or a full month's rent for their commission. For example, if you plan on charging your tenant $1,200 a month, you would owe the Realtor a one-time payment of $600 if he/she asks for half a month's rent or a one-time fee of $1,200 if he/she asks for a full month's rent. Depending on the real estate market, the average income level in the area you are trying to rent in may determine how high this fee is. Check with a few different real estate companies on rental fees before picking your agent.
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What Do You Want from the Realtor?
It is important to remember that real estate agents provide more than one service. If you are simply asking the agent to produce a tenant as a referral, the fee will be on the low side. If you want the realtor to also run a background check and help you to draw up your leasing agreement, the fee is usually higher.
When getting a realty firm involved in helping you create your contract, it is important to understand its terms upfront. If you are dealing with a yearly rental property, the realtor may charge just a one-time fee of a month's rent at the time the contract is signed. There are other real estate companies that want another cut of the action if the same renter wants to renew the contract the next year. Always make sure to ask questions about all charges and services and to work with a real estate firm whose payment policies you are comfortable with.
When dealing with shorter term rentals such as a vacation house that may be rented to one family for two weeks, another family for one week and a third family for four weeks, some real estate agents simply charge low finder's fees of a couple of hundred dollars. It is typical to find these types of agents in beach front areas. These services are not as readily available in typical suburban, non-resort areas.
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Is an Agent Necessary?
An agent isn't always necessary when renting your home. If you have experience (or know someone who does) using marketing tools such as Craig's list and newspaper ads to attract renters, you may be fine on your own. If you are a new landlord, using a real estate agent can take a lot of pressure off of your plate and help your first rental transaction go smoothly.
If you are renting out vacation property, a realtor can be a valuable asset since he/she can explain to potential renters key factors about the area such as blocks from the property to the beach, local attractions and noise regulations. If you are working a full-time job, you may not have the time to answer these types of questions, especially if you are renting your property to a variety of different renters over the course of the vacation season.