Last Updated: September 21, 2023 by Jessica Menefee
While renting out your home without an agent is a viable option, working with a real estate agent who specializes in rentals can offer numerous benefits. Not only can they provide valuable insights into rental prices, but they can also help you find great tenants and make informed decisions about property upgrades. In this article, we will explore the advantages of working with an agent and provide you with a step-by-step guide on how to rent your house with their assistance.
Benefits of Working With an Agent
Utilizing the services of a qualified local agent who understands the rental market can be advantageous in several ways:
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Insight into rental prices: A highly qualified agent will have a deep understanding of rental prices in your area. They can help you set a competitive rental rate that maximizes your earning potential.
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Advertising and marketing expertise: Experienced agents have the tools and knowledge to attract more potential tenants to your property. Their advertising and marketing strategies can help generate greater interest and increase the likelihood of finding the right tenant quickly.
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Efficient applicant screening: Agents can help you sift through applicants faster, saving you time and ensuring that only highly qualified individuals are considered for your rental property.
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Avoiding property vacancies: A vacant property can result in lost income. Agents can help you minimize vacancies by leveraging their network and marketing resources to find suitable tenants.
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Focus on landlord duties: Managing a rental property requires time and attention. By working with an agent, you can delegate certain responsibilities to them, allowing you to focus on being a landlord and potentially managing multiple properties.
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Performance-based payment: In most cases, agents are only paid if they successfully find you a tenant. This incentivizes them to work diligently to secure a qualified occupant for your rental property.
10 Steps to Renting Your House With an Agent
To ensure a smooth rental process, follow these steps when working with an agent:
1. Identify Rentability
Before proceeding, confirm that your property can be legally rented. Familiarize yourself with lender policies, insurance rules, and all local and federal renting and zoning laws to ensure compliance.
2. Find a Qualified Agent
Not all real estate agents are created equal. Take the time to research and interview potential agents to find one who specializes in rentals and meets your specific needs. Ask about their experience with rental properties, lease agreements, and their knowledge of your local community.
3. Run a Rental Market Analysis Report
Ask your agent to conduct a Rental Market Analysis (RMA) on your property. This report will provide insights into rental prices in your area and help you determine a suitable rental rate. Consider factors such as nearby schools, community amenities, and upgrades in the house when comparing your property to others.
4. Complete Property Repairs and Upgrades
Invite your agent to assess your property and identify any necessary repairs or upgrades. Their expertise will help ensure your property is in optimal condition and appealing to potential tenants. Prioritize repairs and upgrades that offer the best long-term return on investment.
5. Hire a Cleaning Professional
Make a positive first impression by hiring a professional cleaner for a deep clean of your property. A clean space attracts highly qualified tenants and increases the chances of securing a quick rental.
6. Set Your Rental Price
Consult with your agent to determine an appropriate rental price. Balance your expenses, such as mortgage, taxes, insurance, and fees, with the need to attract tenants and earn a profit. Clearly communicate your budget and willingness to negotiate to find the right balance.
7. List and Advertise Your Property
Rely on your agent's expertise in advertising to effectively market your property. High-quality photos and well-crafted descriptions are essential. Discuss their advertising strategy, the platforms they plan to use, and how you can contribute to the promotion of your rental property.
8. Discuss Rental Applications and Tenant Screening
Work with your agent to develop a comprehensive and legally compliant rental application. Ensure the application includes information for proper tenant screening and reflects your specific requirements, including smoking and pet policies. Familiarize yourself with the agent's screening process and their procedure for denying rental applications.
9. Sign the Lease Agreement
Once you have selected a suitable tenant, finalize the lease agreement. Your agent can assist in creating a comprehensive lease agreement that outlines the terms, responsibilities, and eviction process. Be sure to review and sign the agreement as the landlord.
10. Determine Next Steps
While most agents do not provide ongoing property management services, you must decide how to proceed as a landlord. Consider whether hiring a property manager is within your budget, as they typically charge between 8% and 12% of the monthly rent. Alternatively, you may choose to manage the property yourself.
Do I Need a Real Estate Agent to Rent My Property?
Renting your house without an agent is entirely possible and can save you money. However, working with an agent can provide significant benefits, including time savings, vacancy avoidance, and reduced workload. Consider your specific circumstances and weigh the advantages and disadvantages before making a decision.
How Do Real Estate Agents Get Paid for Rentals?
The payment structure for agents varies. They may charge a flat fee (e.g., 50% of the monthly lease amount), a percentage of the yearly lease amount (e.g., 10%), or an entire month's rent. These fees may initially seem significant, but agents' expertise and ability to find tenants quickly often offset the cost by minimizing vacancies.
Renting your house with the assistance of a qualified real estate agent can be a profitable and efficient experience. By following these steps and leveraging the expertise of an agent, you can attract reliable tenants, maximize your rental income, and focus on the responsibilities of being a successful landlord.