Many landlords point to the same part of the rental process as their number one priority: tenant selection. Filling vacancies is vital to success, and finding the right tenants for each property is just as important.
Using a rental agency to assist with advertising vacancies, screening tenants, and choosing a good fit is one of the many ways landlords improve their tenant selection process. Without streamlining this process, you can cause yourself headaches and lose out on potential profits.
What are rental agencies and how can they help you accomplish more as a landlord? Learn all about these potential partners and what they can do for your business today.
A Table Of Contents On Rental Agencies
Hiring a rental agency to boost your business may not be necessary, but it can be an easy way to improve your profit margin. What is it about rental agencies that work well for some landlords? Today, you can find out the following:
- What Is A Rental Agency?
- The Benefits Of Rental Agencies For Landlords
- Types Of Rental Agencies
- FAQs: Utilizing Rental Agencies Near Me
- Will A House Rental Agency Help Your Business Grow?
What Is A Rental Agency?
A rental agency is a company that provides services to both tenants and landlords. The rental agent can be thought of as a liaison between these parties. They help tenants looking for rental units connect with landlords looking for tenants. By providing this service to both parties, they streamline this part of the rental process.
Rental brokers, sometimes known as rental agents, are paid by landlords or their property management companies to market vacant properties and fill those vacancies. Tenants and tenant applicants, however, do not usually pay rental agents for their services.
The renting process goes faster whenever a rental agency is involved. They market properties to a broader audience than landlords usually manage, and they have many contacts for tenants and landlords who can help fill vacancies quickly.
Rental Agency vs. Property Manager
There is often confusion around the phrases “rental agency” and “property manager.” Which one are you hiring, and which makes the most sense for your business?
Rental agencies work on acquiring rentals for landlords or property management companies. They find tenants, show properties, screen tenants, and set up leases. After this, they are not typically involved in the rental process. A landlord or property manager usually takes over from there.
Property managers sometimes take on the duties of a rental agent, but they also handle tasks beyond the scope of renting properties. They also manage day-to-day communications with tenants, maintenance requests, property improvements, etc. The exact extent of their work depends on the contract with the property owner and landlord.
Ultimately, the best way to be sure about who you are hiring is to discuss the specifics of contracts before committing to any rental agency or property management company. This will ensure that you’re covering necessary tasks and only paying for what you need.
There are cases when you might even want to hire both. A rental agency that excels by rapidly filling vacancies, paired with a high-quality property manager, can make for a dream team to keep your rental business booming.
The Benefits Of Rental Agencies For Landlords
Why should you consider utilizing an agency to rent faster when you could find tenants for yourself? These significant benefits may entice you to give these agencies a shot.
1. Market Your Property
One of the most important things you can expect your rental agency to do is market your property. This is one of their primary skills. From writing the copy for rental ads to ensuring the property is correctly photographed for the best results, a rental agent ensures your property shows off all it has to offer in all marketing efforts.
You may wonder if rental agencies near me benefit from local real estate knowledge, and you’d be correct. These companies will know where to market to reach the right audience for your property, and they’ll collect tenant applications quickly with this knowledge.
Offline and online marketing is a considerable portion of what rental agencies can do for you. Marketing is time-consuming and requires a lot of knowledge to do successfully. You already do a lot as a landlord — learning marketing is another hurdle you might need more time to be ready to take on. Hiring a rental agency lets someone with knowledge take on that task instead.
2. Screen Tenants
Rental agencies typically handle screening of all incoming tenant applications. Based on your parameters, they will go through all applications to determine which are the best and which have serious red flags.
Every year, rental agents go through hundreds of applications. They are familiar with what works and what doesn’t, so they have an excellent foundation for streamlining this part of the rental process for your business.
Improving your tenant screening is a key to improving your overall profit margin. Work with rental agencies in your area to do just that with better tenant screening.
3. Lease Agreements
In most arrangements, rental agencies are also responsible for signing the lease agreement. While you may set up the contents of that lease and approve it beforehand, they will work out the details of signing with the tenant. This frees you up from a lengthy process and ensures that experts review the lease for local law compliance before signing it.
4. Property Management
This final benefit is optional. Sometimes, you may hire a rental agency to take on certain aspects of property management, such as renewing leases at the end of a lease term or fielding certain tenant communications. Most of the time, these duties will instead go to a property management company.
Suppose you do not use a property manager, though. In that case, you may work with your rental agency to set up pre-move-in renovations or maintenance activities on the rental property.
Types Of Rental Agencies
Not all rental agencies function the same way. These are the most common types of rental agencies that you will encounter:
Rental Agencies Near Me
Local rental agencies are made up of brokers licensed in your area to help connect you with tenants. These agents have local experience, which means they know the best places to advertise, what common red flags are in your area, and how you can better compete in the local rental market.
Working with these types of agencies is often preferable to landlords due to the local knowledge that can be provided through their services.
Online House Renting Agency
Another common type of rental agency used by landlords is an online one. Websites like Apartments.com, Zillow, and similar competitors make it possible for landlords to easily list properties and allow the site to do the marketing. The site helps facilitate communication and set up showings, but you still need to show up for these events.
This online renting agency provides a service that falls between do-it-yourself landlording and hiring a rental agent. You get assistance and syndicated marketing from the online platform, but completing other essential screening tasks is still up to you.
Another way to acquire a rental agent is to hire a property management company that includes tenant acquisition services in their package. This means they have talented personnel as part of their team who will work on advertising the property and locating the best tenants for your properties. These services come bundled with other property management services.
Beyond Tenant Acquisition
Once you’ve found tenants for your properties, either through your own means or a rental agency, there’s still a lot of work to be done. Managing all the moving pieces required for being a landlord can be overwhelming.
At RentPrep, we help landlords through free resources, including our landlord form bundle. This mega pack of forms gives you dozens of templates you can utilize immediately. These forms make your work more accessible than ever and are entirely free. Check them out today!
FAQs: Utilizing Rental Agencies Near Me
If you’ve never worked with a rental agency before, you might be confused about what the entire process looks like and whether or not it’s worth it for your business. The answers to these frequently asked questions may help you decide.
How does a house renting agency work?
House renting agencies help landlords market their rental properties, show them to potential tenants, and fill the vacancies. Rental agents usually work with the landlord and tenant as a connecting party up until the lease agreement is signed. In some cases, the rental agency may get involved again when it comes time to renew the lease.
The exact tasks taken on by a rental agency may vary from place to place. Before you begin working with any particular agency, discuss your business needs so that you’re on the same page as you move forward.
How do rental agencies make money?
Rental agencies charge landlords a fee when finding tenants for a property. The exact price varies depending on the property type, the rental agent’s terms, and other aspects of the business deal.
The amount paid to a rental agency may equal one month’s rent, or it can be a percentage of the annual rent paid at the property. The exact amount will depend on the arrangement set up between you and the rental agencies near you. Be sure that you are comfortable with the amount being charged. It should not prevent you from profiting from your rental property.
Who is better to work with: a property manager or a rental agent?
Landlords learning about rental agencies for the first time may wonder if hiring a rental agent or a property manager is better. Ultimately, that decision is up to you, but you need the proper foundation to make a decision.
Property managers take on more of the rental process than rental agents. Property managers often handle maintenance requests, rent collection, tenant communication, lease renewals, and more. The scope of their work varies depending on the contract, but they typically take on a large portion of day-to-day work.
On the other hand, rental agents are more focused on one part of the process: filling vacancies with high-quality tenants. Their actions center around advertising properties, showing properties, screening tenants, and choosing the best options for the landlord. They also help with the leasing process.
Which type of service is better for you depends on the challenges that you are currently facing. If you manage many properties and find it impossible to keep track of what’s happening at each one, it’s time to bring in a property manager. If you’re keeping up with day-to-day activities but cannot find great tenants, a rental agency can help.
Assess where your business has the most room for improvement and hire help in this area first.
How much does it cost to hire a rental agency versus a property manager?
While property management companies usually charge a monthly fee of up to 15% of monthly rent and a flat fee for their services, the fees for rental agencies don’t work the same way. In many cases, rental agencies charge a flat fee equal to one month’s rent for their services of advertising, screening, and leasing a rental property to a tenant.
Of course, the exact terms will vary. The fee may seem steep, but it can be worth the cost if you can find a tenant through a rental agency that stays for a few years and reduce your overall turnover rate.
Will A Rental Agency Help Your Business Grow?
Hiring a rental agency to help find tenants and fill vacancies saves time, prioritizes finding the right tenants, and reduces the turnover rates at your properties. Combined, these changes can boost your profits and revitalize your business.
Consider hiring rental agencies for management if you are struggling with the following:
- Keeping vacancies low
- Finding high-quality tenants
- Advertising vacant properties
A housing rental agency can do wonders to improve these aspects of your business at a reasonable cost. Invest in your future success with a rental agency.