how do realtors get paid for rentals

how do realtors get paid for rentals? (and increase their revenue streams)

How do Realtors get paid for rentals? This is a question that many people have when considering how to list their property. Some realtors will let buyers pay for the commission upfront while others may be paid after the rental. In this article, we will talk about how you can get your money faster and how to avoid problems with collecting it in advance!

How do Realtors get paid for rentals?

Percentage Based

In some cases, the commission is calculated using a percentage of the yearly lease amount.

For example, If an agent charges 5% of the yearly lease, and the monthly rent is $3,000 making the yearly total $36,000, the agent will make a $1,800 commission.

However, the listing agent may need to split the total commission with the tenant’s agent if there is a cooperating agent in the transaction.

Amount Equal to One Month’s Rent

Another popular approach for calculating commission fees is to charge one month’s rent. This is less complex than the previous example.

In the above scenario, the listing agent would also need to pay the tenant’s agent out of the total amount if there was another agent involved based on their offering terms in MLS.

For example, if a tenant’s agent brought a tenant to the transaction and the offering in MLS was $500 to the tenant agent; then in the above example out of the $1800 commission, $1500 would go to the listing brokerage and $500 to the tenant’s agent brokerage.

Additionally, the brokerage would take their split as well from the agent and the agent would get paid the remaining amount.

The Tenant Pays Agent

In some cities, the standard is that the tenant pays a percentage of the first month’s rent or a flat fee to the agent. While this approach is less common, it does happen in some areas and can be a good option for agents trying to get their commissions faster or who are new and building up a clientele.

Typically, this is how it works


– The tenant will pay the real estate agent a fee for helping them find the property.

– This amount can be negotiable and typically ranges from one to two months’ rent.

– The fee is either paid in full at the time of signing or deducted from the tenant’s security deposit when they move in.

The benefit for an agent working with this setup is that they can get their money faster and use it on another deal!

Property Management Fees

Even after negotiating a tenant, a real estate professional may continue to work for the landlord. Some agents stay on by managing the property for a landlord. In this case, the agent could discover another source of income through rentals.

Many agents will charge a percentage of monthly rent for ongoing management of the property – say 10% of monthly rent each month. So if the monthly rent was $3000, an agent might receive $300 per month if the agreed-upon management commission was 10% of the monthly rent.

Additionally, an agent might negotiate an additional fee for lease renewals if they secure the tenant to extend their current lease.

What services does a Realtor provide for Rental Commission?

how do realtors get paid for rentals

Realtors may provide any number of services for a real estate rental commission. Some examples include:

– Finding qualified real estate rental tenants

– Inspecting the property and reporting how long it will take to get repairs done after the damage is found on inspection

– Negotiating lease terms with the tenant(s) if they are looking to extend their current lease

– Preparing lease and other forms

– Conducting tenant interviews during the showing process if they are selling themselves to the applicant as a potential candidate for their property

-Conducting backgrounds checks, verifications of previous rental history, and verification of other criteria.

– Coaching tenants on how to take care of the rental so it will maintain its resale value over time

What are the Advantages for a Real Estate Agent to Work with Rentals?

There are several advantages to working with rentals, including:

– The commissions can be very high if the tenant is paying out one or two months’ rent and the monthly rent amount is substantial.

– One month’s commission fee may cover time invested in showings and negotiation of lease terms for a new tenant.

– It provides real estate agents another income stream that doesn’t rely upon how many listings they sell.

– It provides real estate agents another source of referrals, as landlords often know other people who are looking to rent their property

-It’s usually a lot quicker of a transaction when tenants have a shorter time frame to find a property and an impending move-in date.

What are the disadvantages of working with rentals as a real estate agent?

Some real estate agents prefer not to work with rentals because:

– The real estate rental commission may not be high enough to make it worth the time and effort invested.

– Real estate agents might spend more time working with tenants than they would if they were representing someone buying or selling their home, which could cut into how many listings agents sell each month.

– They don’t have an interest in property management.

Should Landlords or Tenants hire Realtors to Find a Rental?

Tenants and Landlords may benefit from hiring a real estate agent to help them find the right rental property, as they can represent their best interests.

– A tenant should hire an agent if they are short on time and want someone who is familiar with how rentals work to pick out properties for them.

– If renters have pets or specific requirements that they need to see in their next rental, they should hire an agent who can help them sort through properties that may not meet all of their criteria.

– Tenants who are working with a tight budget should hire an agent to help them negotiate lower rent costs.

Landlords often benefit from hiring real estate agents because they work on the landlord’s behalf to find tenants, inspect properties and handle negotiations.

– Agents often know how much rent is fair market value and what expenses will be required once tenants move in, such as utility rates or fees if they have a pool.

– Landlords can hire agents to negotiate real estate leases for them, as well as take care of other administrative tasks such as advertising their property and conducting background checks on potential tenants.

How to find rental leads as a Realtor?

real estate rentals for agents

There are several ways that realtors can find rental leads, including:

– Listing their own property with a local brokerage

– Reaching out to landlords they know through their personal network of contacts

– Posting on platforms for people seeking real estate rental services. This may include Craigslist, Facebook groups, or Facebook Marketplace.

-Sending direct mailers to absentee real estate owners in the surrounding area

-Posting on bulletin boards in local community centers and businesses.

-Networking with local leasing companies and property management firms.

How to be Successful with Rental Listings?

Before getting started, real estate agents must confirm that they have all of the documents necessary and have a full understanding of how rentals operate.

Real Estate Rental Market Research

Understanding how much rent should be paid in your area may assist you to avoid being outbid by other agents or missing out on potential rental income.

Property Management Course

It may be a good idea for an agent to take a course in property management to learn how the process works.

Negotiating for a Rental

It can be beneficial to have experience when it comes time to negotiate the terms of the lease with tenants, as this is not always something that agents are used to doing in their work.

Marketing Real Estate Rental Properties

Landlords may benefit from hiring an agent to help them market their property, as many landlords do not have the skills or time required. Agents should be up to date on the best practices and platforms for marketing rental properties. Agents should have a strong knowledge of the best marketing practices and real estate social media marketing tips for rental properties.

Lease Agreement Knowledge

It’s also critical for agents to ensure that landlords are aware of their responsibilities as well as those of potential tenants while drafting a lease agreement.

It is important for both parties involved in rental agreements to make sure that all of these responsibilities are outlined as well as how they are expected to be carried out.

As you can see, there are several advantages and disadvantages to working with real estate rentals as a real estate agent. Whether or not it’s right for an individual depends on how they like to work and how many listings they sell each month. All in all, though, it is another avenue of income so agents should consider if the time investment is worth it!

If you enjoyed this article about “How do realtors get paid for rentals” make sure to Pin it for later! And if you’re a real estate agent looking to make your real estate marketing easier – make sure to check out our membership plans filled with real estate content and real estate templates make exclusively for realtors!

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