Who’s The Best Person To Lease Your Rental Property For You? | Nexus Property Management® Franchise

18 April 2024

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THERE ARE THREE OPTIONS BUT ONLY ONE IS THE BEST CHOICE

More and more people are looking into renting their properties these days and that leads to a natural first question: Who’s the best person to lease your rental property for you? These days, with Youtube in our pockets, it’s more common for landlords to think they could likely do it themselves. Then there are some people who go to the complete opposite extreme and seek out a realtor. We’ll let you know why neither of those choices stack up to hiring a professional property manager when it comes to your leasing needs.

LEARN MORE: THE TENANT POOL HAS NEVER BEEN DEEPER OR STRONGER THAT IT IS NOW

WHY LEASING IS SO IMPORTANT:

Once you’ve purchased your investment property and added value through upgrades and maintenance, there is no piece of the puzzle more important than placing the right tenants. Qualified tenants that are a good match for the units you have available are the key to long term, hassle free tenancy. Placing the wrong tenant will increase your chances of a costly eviction and believe it or not, will also increase the amount you need to spend on maintenance.

The goal is to place someone who will take pride in your property and treat it as their own. If you can find that person and treat them with respect, you’ll be in great shape…but that is easier said than done. When it comes to that all important search, you’ve got three options:

LEARN MORE: MAXIMIZE RETURN AND ATTRACT QUALITY TENANTS DURING TURNOVER

OPTION 1: DO IT YOURSELF

When in doubt, try it yourself. There are plenty of people who take this approach and with sites like Zillow flooding the web with data about most properties out there, it makes some sense. Although they (whoever they are) have never actually seen the property in person, Zillow will use an algorithm based on comparable properties and spit out a rental price estimate and will even let you pay them to use their applications. To be fair, this is much more helpful than the days when this didn’t exist and landlords might try to rent on their own. But it’s still very generic and is very static.

Ultimately, there are tools out there to help you get your product out to the world, but you still need an experienced expert to help you sift through the countless leads you should be generating. Who is worth showing? What variables are most important? What questions will get you into trouble with discrimination and Fair Housing? What are the telltale signs of dishonesty? Of honesty? By handling the leasing yourself, you’re gambling. If you’re going to plant a garden and you’ve put time and effort into tilling the soil or building some raised beds, don’t cut corners and plant questionable seeds.

PROS:

-Save money (professional leasing can cost from ½ month’s rent to a full month’s rent)

–Maintain control

-Get to know the tenants

CONS:

-Getting too close to the tenants (personal relationship vs. business relationship)

–Higher risk of discrimination issues

-Less experience screening tenants

-Less experience assessing tenant qualifications

-More likely to settle in hopes of creating income more quickly

-Less experience creating an enforceable lease

-etc…

LEARN MORE: BALANCING THE LINE BETWEEN BUSINESS AND PERSONAL RELATIONSHIPS WITH TENANTS

OPTION 2: HIRE A REALTOR

To combat the abbreviated list of “cons” above for those who opt to lease themselves, it might make sense to hire a realtor. Hiring a realtor is better than going it alone. To revisit that pro/con list above, you’d be swapping out the pro of saving money for…well…really for the first two cons. You’d successfully create a buffer between you and the tenants, which is good, but the truth is, you wouldn’t really be gaining much experience. Yes, realtors are licensed and will be able to navigate the market and any issues that arise better than you’d be able to do yourself, but very few realtors do (or want to do) rentals. Realtors work for commission and they can make several thousand dollars per house they help sell or purchase. The returns on rentals are much lower and most realtors will only do rentals if they have to.

There’s one other catch. Unlike you, the landlord, beyond their own ethics, the realtor doesn’t really care how qualified the tenant is because they’ll never have to deal with them again. They won’t place a poorly qualified tenants (hopefully), but they also don’t have any incentive to work toward finding you a highly qualified match for your property.

PROS:

-Will create buffer between you and the tenant candidates

-Has more experience and can adjust on the fly

CONS:

-Will cost you one month’s rent

-Typically don’t do rentals and aren’t as tapped into that market

-Typically don’t like to do rentals (much smaller commission)

-No real incentive to find you the best tenant possible

LEARN MORE: 3 REASONS IT PAYS TO HAVE A LEASING EXPERT IN YOUR CORNER

OPTION 3: HIRE A PROPERTY MANAGER

When it comes to filling rental property vacancies your best bet is a professional property manager who handles rentals regularly. Instead of occupying their time with the sales market, property managers are immersed in the world of rentals. They not only place tenants regularly but they also interact with them daily during property inspections and in servicing maintenance requests. Who better to place your next tenant than a real estate professional who communicates with tenants for a living?

Property managers also have the incentive to find you the best tenant possible because it’s very likely that they’ll be the ones working with those tenants going forward. Their ability and opportunity to build relationships from day one is the best way of fostering that relationship where the tenant comes to treat the unit as their own. With a property manager, you’re much more likely to find that otherwise elusive hassle free tenancy.

PROS:

-Experienced in this task and in working with tenants

-That experience helps them assess strongest and most problematic candidates

-Will act as buffer between you and tenants (tenants won’t even know who you are for the life of their tenancy if you prefer)

–Incentivized to find the best candidate

-Dedicated to this process and not dreaming of bigger paydays (i.e. selling or buying property)

CONS:

-Cost 1/2 month to 1 full month’s rent

-Not all Property Managers are created equal and some are actually realtors in sheep’s clothing…so do your homework

LEARN MORE: TO HIRE THE BEST PROPERTY MANAGER FIND A SPECIALIST, NOT A JACK OF ALL TRADES

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Mick Lefort is the General Manager of Nexus’ New Haven County Franchise Office and the Vice President of Operations for Nexus Property Management®, a National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.

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