As a real estate agent, you would think my response would be “Always!” but here is my unbiased opinion on this matter. Choosing a tenant, although time consuming, is not exactly rocket science; however, there is some skill involved. For this reason, brokers may be necessary to make the lives of property owners easier; but this convenience comes at a cost. Here are a few questions you should ask yourself before you decide to hire a broker or DIY.
1. Can you afford it? Is the investment revenue from your rental enough to justify the real estate broker’s fee (typically one month’s rent)? If not, consider screening and choosing the tenant on your own, or requiring a two-year lease so the real estate agent’s fee gets you twice as much time.
2. Is your rental in demand? Demand is based on how many people are looking for your type of unit, the price, and the time of year. If your unit is in demand, and it’s the right time of year, you’ll save money by doing it yourself. However, if it’s the dead of winter and the applications are few and far between, using an agent can save you money. They can put your property on the multiple listing service and get it in front of many more people than your “for rent” sign. With all the extra exposure, it will take less time to find a good tenant using a professional. To help determine demand you can always try on your own for a week or so and gauge the response. Also, keep in mind that spring is a much easier time to rent than winter, and a smaller affordable unit is easier to rent than a big house, since you have a larger pool of candidates to choose from.
3. Do you know how to put your listing online and which websites to use? Several years ago, there were only a few places to list your rental online, so the decision was fairly simple. Now there are hundreds of websites that offer this service. It’s difficult to know which one will work best without spending hours manually listing your rental on each of them one at a time. Without knowing which website is best in your area, you could be wasting your time. One of the most useful services a real estate broker provides is exposure for your rental. A lot of brokerages pay for services that send your listing to tons of online sites, not to mention the benefit of having your listing automatically marketed to other real estate brokers, who stand to make a commission if they provide a qualified renter.
4. Do you have the time to deal with it? Finding a tenant takes quite a bit of time; you’ll be taking calls, setting up appointments, driving back and forth to the rental, running and reviewing credit checks, writing up a lease and getting it signed, and more. This could be particularly time consuming if you live far from your rental or price it wrong. Choosing the wrong price can lead to many people browsing and checking out your unit, but never actually applying. All of this can cost precious time and money.
5. How well do you know the market? Pricing your unit can be tough if you don't have intimate market knowledge. You can learn about the market by checking other websites for comparable rentals in your area. However, brokers have access to more information via their local multiple listing services and may be able to get you a higher price than you thought. In this case, a broker’s fee may be justified if they secure a higher rent for you.
6. Do you understand the laws and restrictions in your state? Do you know how to write up a lease, and what to do with a security deposit? It’s always recommended that you get educated, but if you don't want to become an expert on the topic, you may want to hire one.
The decision to hire a real estate agent or do it yourself hinges on many factors, so consider all of your options before you choose. If anyone out there is looking for a real estate broker in the Chicagoland area, feel free to reach out! My website is LucaLollino.com.