RENT OWN SELL
Newyork
RENT OWN SELL
Newyork
A successful real estate investor is expected to capture leads quickly and maintain their rental properties. If you research brokerage property management, you will likely come across terms like rental brokers, leasing agents, or property managers. But what do those terms mean, and how do you know which is the best fit for your real estate investment business?
It’s easy to confuse property managers with lease brokers and vice versa since they can both assist with leasing rental units, maintaining rental properties, and managing tenant relationships, but there are key differences between them.
Here are some distinguishing details about rent brokers, lease brokerages, and property managers that will help you decide which is right for you.
Rental brokers conduct property showings and manage property lease signings with new tenants. Rent brokers also work with tenants to find available units to rent by researching property listings and arranging showings. They can also help the landlord with the tenant vetting process. Brokers charge the tenant a fee for their services, which is usually around 15% of the first year’s rent, and is payable when the tenant pays his or her security deposit and first month’s rent. Landlords, on the other hand, don’t have to pay rental brokerage fees– they can use this service for free.
Sometimes the property is exclusively represented by one rental broker. If a tenant is interested in viewing an apartment or renting it. The potential tenant would have to work with the broker. In some cases, landlords will also ask a few brokers to find tenants or make the listing available to all brokers.
Lease brokerage, or lease agents, work for brokerage firms, apartment complexes, and landlords. They are responsible for showing potential tenants available rental apartments, conducting tenant screenings, and coordinating the lease signing process. Most of a leasing brokerage’s tasks are similar to those of a rental brokerage.
One significant difference is that the tenant may not have to pay a lease broker a fee for using their services; instead, the brokerage firm or landlord has to pay the fee. Usually, the agent’s commission is equal to one month’s rent, and it is paid when the lease agreement is signed. Depending on the situation, the agent’s commission can be paid individually or split between both parties: tenant and landlord.
Rental property owners hire property managers to manage all tasks related to their rental unit. They advertise vacant units and locate potential tenants to occupy them. In addition, they are responsible for managing property maintenance, signing lease agreements, collecting rent, handling financial matters, responding to maintenance and repair requests, writing and clearing lease violations, and handling evictions.
A property manager performs all the tasks of a leasing agent. But tenants don’t have to pay for property managers’ services. Instead, landlords pay property managers each month. Their fee usually ranges between 7% – 10% of the monthly rental income. Sometimes property managers also charge a “leasing fee” to owners for finding new tenants to rent vacant units.
Property managers must follow their state’s licensing requirements. Property management companies employ leasing agents who handle all tenant-related business. When a tenant works with a property manager, they might refer to the leasing agent as the property manager. It depends on the state’s licensing requirements whether or not the titles can be used interchangeably. Property managers may represent several landlords at a time. Landlords with extensive real estate investment portfolios or apartment complexes will have designated property managers who represent them.
Lease brokerage or leasing brokers show potential renters available units for rent. A property manager, on the other hand, manages all rental activities that happen after the tenant signs the lease. Property managers tend to be more focused on customer care and ensuring that tenants are happy and safe. While a rent broker’s priority is to fill vacant units as quickly as possible.
Given the specifics of each of their jobs, property managers and rental brokerages often find themselves working together.
As a real estate investor, which do you need the most: a property manager or a leasing agent?
Leasing brokers are best for real estate investors who don’t have large complex portfolios or for investors who plan on managing their property primarily on their own but require assistance for specific aspects of the process, like tenant screening. On the other hand, property managers are better suited for investors who have several rental units since property managers provide a wider selection of services.
You might find that you need both, especially if you have a reasonably large rental portfolio with a revolving number of vacancies. Tenant brokers could be busy finding and screening new tenants throughout the year. While the property manager handled existing renter relations. In this regard, both the leasing agent and property manager could partner to provide tenants with service continuity, which strengthens the tenant-landlord relationship. If you’re a property owner who has an exceptionally large portfolio that includes hundreds of rental units. You might need multiple property managers and leasing agents.
If you, as a property owner, can afford to work full-time as a property manager, it’s possible to do the property management work yourself. You would then be able to increase your profit margins since you wouldn’t have to pay fees for property management services. However, you would need to invest in the right tools to professionally run your real estate properties.
Depending on the property type and location, you are likely to come across different rental management professionals like lease brokerage, rent brokers, and property managers. In NYC, leasing brokerage and rent brokers are common. While property managers are often associated with multi-family housing communities like apartment complexes, duplexes, and triplexes.
Regardless of who you hire to run your rental property, make sure you are comfortable working with them. And that they have the requisite experience needed to properly run your rental units and understand the local landlord-tenant laws.
