Help on (Rental) Prospects

[BuyHawkeye]

OK, here is the deal. For a few key reasons, websurfers are finding my website when searching for rentals in my area. I get contacted daily with requests to show rental properties. The Co-op fee in this area seems to be around 10% of the rental amount. Not to sound greedy, but it just isn't worth my time. My question: "How do I make it worth my time?"

I am soliciting opinions and experience. What do you guys do?

[Northern_IL]

For rentals in Northern Illinois I get the first months rent for my services. Granted, most of the rentals are/were on the market at the same time. The sellers would like to sell the property first and foremost but accept the rental because they are just looking for some relief.

This would be a great topic to bring up at your next local membership meeting.

[ericbadgley]

Tell them you don't do rentals. spend your time were you gonna make money. I don't show trailers, the commission is too low it just simply isn't worth my time.

[Bigtoe]

I politely tell them I don't handle them and turn to my wife and say Neeeext.

[SteveTheSultan]

Sounds like you have a great opportunity.

Just because it is a lower dollar amount doesn't mean it is not profitable.
Would you rather wait for a 20,000 deal to close or get 10 rental agreements for 1000.00 signed? The key point is that you have customers out there with a need that are calling you to full fill it.

Also, rental clients can turn into future buying clients. For now, people may need to rent to save money towards a home. You may also be able to help them buy the property they are renting.

Even though you are not walking away with a large commission, you have just gained a new client.

So get the renters into homes and then you have a person that you can show new properties to.

[Dan Connolly]

I tell them that they have to guarantee me one months rent as a commission. If I get paid by the listing agent it comes off the fee owed by the tenant. They have to pay up front and will get back whatever the listing agent pays. They have to drive by the houses first and then I will show them the ones that they like. Most of the prospects don't accept the deal and that's okay. I think they are prospective purchasers down the road, so I am willing to do it.

[BrandonSternfield]

As renters are easier to sell, the lower payment reflects that.

You could easily take care of 3-5 renters in the time of one normal buyer. And with the law of averages, you'd have more renters close then buyers.

[Brian Mc]

Please let me know when you find out! We have found it just isn't worth our time but continue to do it for SOI people who may be future buyers one day, hey we're full service.

[lprest]

Do what a lot of agents in our town do- refer them to a good property manager (in our town- that's us). We don't pay them a fee- but it creates a lot of good will, both with us AND with the people who may be potential buyers or sellers down the road. If they DO buy/sell we give them back to the original agent if they want to go back. If they DON'T want to, they want us to handle it (this happens about 50% of the time) we pay a referral to the original agent.

[austinbroker]

I have to admit, there are probably about a few dozens renters in Austin who do not like me. When people call about a lease listing, I usually try to refer it out to a leasing agent, but sometimes I have been known to get busy and never call them back.

There's no money in it unless you specialize in property management with a large inventory of lease listings! A $1,000 home for rent will net you about $400 with a 40% co-op commission. But most agents offer around 25-35% in Austin. What's that? 250, 350 bucks! That will pay for my groceries and beer after I show them 10 homes and go through the same paperwork and contract process as representing a buyer.

No thanks! I'll spend my time working sales and make 20X more per transaction.

I come from very modest beginnings and I used to feel bad turning down renters and $50k mobile home prospects. When I first started in real estate in '99 I jumped on renters. Now I refer out lower-end sales leads and try to pass along a leasing agent for the renters. You have to go where the money is! If you're a nice guy people will waste your time and walk all over you.

If you want to live in an apartment, lease apartments. If you want to live on the lake, sell homes on the lake! That's so true!


Damn it! I'm turning into a snob!!! I hope my mom doesn't read this when she learns how to use a computer.

*Pardon me, but I need to step into my garage to finish glossing the benz*