As a landlord, you can find suitable tenants for your properties on your own without having to enlist a professional realtor. But while there are several benefits to that approach, there are also negative aspects to consider.
1. Save Money: If you choose the do-it-yourself route in filling your vacancy, you won’t have to pay a fee to anyone to secure a tenant for you. Professional Real estate agents normally charge a month’s worth of rent for their services and depending on how much you are marketing your property for, their commission can become your biggest expense.
2. Personal Involvement: By handling every step of renting your property, you will be interacting with your future tenants much more than if you were using a realtor. Also, you are the one who knows your property best, therefore if you are actually showing the property you can talk about the rental much more passionately and help them see why it would be a suitable home.
3. Landlord-Tenant Relationship: You will be screening, selecting, and handing over the keys to your new tenant yourself. That means you will interact a lot more than if you were involving a third-party in the process. Developing a good relationship with your tenants can help guarantee a longer lease term as they will appreciate a landlord they can easily deal with.
1. Time investment. If you are not hiring a realtor, you won’t have their network and skills to rely on. You will have to market your property on your own and the more you promote it, the greater will be the pool of applicants from which you can make your selection. Also, real estate agents deal with rentals day in and day out but you don’t, so you will need to do research on comparable properties to find out how much you can realistically charge for your rental. Developing marketing skills is a necessity – you will have to effectively write listings, create advertisements, and respond to calls and e-mails. Showing the property is also a big part of the rental process and if you don’t live close to your rental you might have to enlist someone to do it for you.
2. Lack of Expertise. Once you’ve narrowed down your applicant pool, it is essential that you can handle collecting their personal information, check their references, and running and understanding their background and criminal reports. Besides, you must become familiar with the federal, state, and local laws and regulations that cover tenants and landlords, especially the Fair Housing Act, which outlines what constitutes illegal discrimination against qualified renters. It is important to use the same criteria in the screening of each candidate and justify your decision based on their credit or criminal history, but not on race, religion, national origin, gender, age or family status. Writing and executing the Lease Agreement will also fall on your shoulders, so you will have to meet with your tenant to discuss the specific terms and conditions of the contract.
3. Cost. If saving money is the biggest factor in your decision, then pocketing the commission you would spend on an agent’s service is a great aspect of handling the listing yourself, but you might end up spending the same amount or more on advertising, professional photography, referrals, and posting fees. The longer you take to fill your vacancy, the more it will cost you.