There are pros and cons to filling a vacancy at your rental property by hiring a realtor. The benefits of listing your rental with a realtor include widespread exposure for your property and less of a time commitment for you. While hiring a realtor to fill your vacancy is the best choice for some landlords, it is not the right choice for all. Here are the cons of listing your rental with a realtor.
May Not Be Number One Priority
Realtors make a commission, but the commission they make is based on the value of the property. For example, a 10 percent commission on a $12,000 a year rental would only be $1,000. In contrast, a 10 percent commission on a $250,000 home would be $25,000, assuming the realtor was not splitting the commission with another realtor. The realtor, thus, has a much greater incentive to try to sell the more expensive home because they stand to make far more money.
With the focus on getting the expensive property sold, your rental may be put on the back-burner. You may be relying on the realtor to get the vacancy filled, but months can go by and you will still have a vacancy on your hands and no additional rent in your pocket.
Cut Into Your Profit
Having a realtor fill your vacancy is not free. The realtor will charge a commission, which will vary based on the specific terms you come to with the realtor. A commission of between three percent and ten percent is common. Therefore, you will have to decide if hiring the realtor is worth the expense.
If the realtor is able to fill the vacancy right away, it may be a wash. However, if the vacancy sits on the market for a few months, you are not only losing rental income each month, but you will also still have to pay the realtor their commission once they finally find a tenant for your rental. The loss of rental income combined with the realtor’s commission will eat into any potential profit, you might have had for the year.
Online Sites Make it Easier to Find Tenants
The internet has been a great tool for landlords. Before the internet, tenants were found through newspaper ads, flyers, and for rent signs in windows. While those are all still viable options, the internet has proved to be one of the easiest ways to find tenants. You can post one ad and reach people all across the country.
May Not Have Expertise in Screening Tenants
A realtor may be able to find prospective tenants for your property, but they may not know how to find the best tenant for your property. The realtor’s goal will be to fill the vacancy as soon as possible. This may lead to them finding a “good enough” tenant and not the “best” tenant for your property. While this may get your immediate vacancy filled, it could lead to problems down the road. If you have to evict the tenant in three months, hiring the realtor was a waste of your time and money.
You may put all of your faith in the realtor when it is just a waste of time. The realtor may be concentrating on getting their expensive homes sold so that they can make a large commission. While you may have hired the realtor believing they would put in long, hard hours trying to fill your vacancy, it may be an afterthought to them.
Due to your faith in the realtor, you have made no other effort to get your property rented. After a few months, your property is no closer to being rented, and generating rental income from the property seems like a distant memory.
Your Property’s Amenities May Render a Realtor Obsolete
The truth of the matter is, you may not even need a realtor to get your property rented. If your property is located in a hot renters’ market, you may be wasting your money hiring a realtor to attempt to fill your vacancy. By placing a few simple online ads, your property may rent quickly and it will save you the expense of hiring a realtor.
In addition, if your property is in a great location, such as nearby public transportation or with a great view, has been nicely renovated or has other desirable amenities, the property may rent quickly without the services of a realtor. Based on these factors, you will have to determine if a realtor is the best method for filling your vacancy.